Newly released data from the Insurance Council of Australia (ICA) indicates that residents of New South Wales (NSW) are facing a notable financial burden unique to their state, with an average additional expense of $305 on home and contents insurance policies attributed to the Emergency Services Levy (ESL).
The ICA’s latest findings, outlined in its submission to the NSW Treasury regarding the Government’s plans to eliminate the ESL, suggest that NSW insurance consumers stand to benefit significantly from the abolition of the levy, as announced by the Minns Government.
A thorough examination of insurers’ pricing data reveals that the ESL directly contributes an average of $252 annually to home and contents policies, $633 to commercial building and contents policies, and $922 to commercial building policies.
When considering the compounding effects of GST and stamp duty alongside the ESL, these costs escalate to $305 for home and contents policies, $766 for commercial building and contents policies, and $1,200 for commercial building policies.
Moreover, the ICA’s analysis emphasizes that the current structure of the ESL disproportionately affects those with limited financial means and fails to accurately reflect the potential demand for emergency services.
The Insurance Council has expressed support for the Government’s proposed overhaul of the levy system and welcomes the opportunity to participate in consultations aimed at replacing the ESL on insurance with more equitable funding mechanisms.
In a statement, Insurance Council of Australia Chief Operating Officer Kylie Macfarlane remarked, “The Insurance Council commends the Minns Government’s decision to abolish the ESL and seek fairer means of financing emergency services, fostering a more equitable system for all. This move represents a significant victory for insurance affordability within the state.”
Macfarlane further highlighted the adverse impact of the ESL on policyholders’ finances across NSW, emphasizing the importance of its removal in facilitating greater access to adequate insurance coverage for families and businesses alike.
“We commend New South Wales Treasurer Daniel Mookhey for spearheading discussions on replacing the ESL, and we eagerly anticipate continued engagement in this vital reform,” Macfarlane concluded.
