Legislation introduced today will require insurers to provide specified data to the NSW Government to help reform the way emergency services are funded.
The amendment to the Emergency Services Levy Act 2017 will give Treasurer Daniel Mookhey authority to access anonymised data including the premiums paid on insurance policies and the Emergency Services Levy (ESL) component of those premiums.
Subject to privacy protections, this data will allow the Government to conduct detailed modelling and design of a new system to replace the current ESL.
NSW is the only mainland state to fund its emergency services by taxing insurance and has the highest average insurance premiums in any state apart from cyclone-prone Queensland.
The ESL has caused premiums in NSW to be around 18 per cent higher for residential properties and around 34 per cent higher for commercial properties.
It’s also contributed to NSW having the lowest rate of home and contents insurance in Australia. 35 per cent of NSW households are going without contents insurance and 5 per cent of homeowners do not have building insurance.
As fewer people take out insurance policies, the emergency services levy burden increases for those who do have cover.
The Government announced the formation of a Stakeholder Reference Group last week, which will provide expert advice and perspectives to government as it moves ahead with this reform.
A public consultation paper will be released in the coming weeks.
Treasurer Daniel Mookhey said:
“It’s imperative that the Government has access to the latest data held by insurers. This will help to redesign the way emergency services are funded in NSW in the most effective way.
“This is information that will help government to model a new system that can sustainably fund NSW emergency services.
“With the cost of natural disasters only expected to rise with climate change, we’re acting now to find a better way to fund our emergency services and ease the burden falling disproportionately on households and businesses that choose to get insured.”