Calls to scrap NSW emergency services levy as insurance costs rise
New South Wales is the only jurisdiction to fund emergency services through a tax on insurance premiums. Home owners and industry stakeholders want that changed.
A coalition of insurance stakeholders is urging the New South Wales parliament to abolish the emergency services levy before the 2027 state election. The levy has surged 54% over the last six years, according to the Insurance Council of Australia (ICA). A recent parliamentary inquiry is investigating a shift in the emergency services funding model and will release its findings later this year.
A local resident, Hans, a pensioner from regional NSW, saw his home insurance bill rise by nearly $1,000, reaching $3,590, with a significant portion being government taxes and levies. To maintain coverage, Hans had to raise his excess from $600 to $2,000, a substantial increase. Insurance is a mandatory expense, unlike other services, and is treated as a lucrative revenue source by the government.
NSW is the sole jurisdiction funding emergency services through a tax on insurance companies, which is then passed onto customers via premiums. Additionally, the state imposes levies on local councils and foreign insured policyholders. All other jurisdictions have adopted a property-based funding model or general revenue funding.
About 36% of homes in NSW lack contents insurance. The ICA is campaigning for the abolition of the insurance tax before the 2027 election, citing a potential $308 annual savings for average insured households and relief for small businesses. NSW Premier Chris Minns has pledged to replace the levy with a straightforward and transparent levy across all properties.
The ICA's modelling suggests over 2 million NSW households would benefit from a replacement property levy.
Written by urgent.news from ABC News AU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
