Insurance giants welcome Emergency Services Levy reform
Insurance giants welcome Emergency Services Levy reform | Insurance Business Australia
Insurance News
Insurance giants welcome Emergency Services Levy reform
Move expected to save homeowners an average of 12% off their insurance bill, insurance leader says
Insurance News
By
Roxanne Libatique
The insurance industry has welcomed the New South Wales government’s decision to reform the Emergency Services Levy (ESL).
NSW is the only mainland state funding emergency services by taxing insurance policies, putting the costs and burden on people living in the state’s most high-risk disaster-prone areas.
“Insurance provides an invaluable safety net and gives peace of mind so people can protect their valuable assets. In a changing climate, it has never been more important,” he said. “We’ve been calling for the ESL and other taxes to be removed for many years because it will make it fairer and more affordable for home and business owners. While we will continue to advocate for wider reform to all unfair insurance taxes across the country, [the] announcement is a significant step in the right direction.”
IAG has been calling on the NSW government to reform the ESL for more than a decade, calling for a fairer, more efficient, and more sustainable approach to funding emergency services.
“Reforming the ESL will help ensure that our emergency services have the funding they need to keep people safe while helping to make insurance as affordable as possible for people and businesses across NSW,” said IAG managing director and CEO Nick Hawkins. “IAG has long advocated for the removal of taxes and levies from insurance to ensure as many people as possible can access the support we provide.
“We play a critical role in helping people, businesses, and communities recover when disasters strike. Making insurance more affordable means our state will be better prepared, better protected, and more resilient into the future.”
NIBA CEO Phil Kewin deemed the announcement “a positive move towards creating a fairer and more equitable system for all.”
“The current ESL model penalises responsible home and business owners who invest in insurance to protect their assets,” he said.
ICA CEO Andrew Hall added: “Reforming the ESL will be a major win for insurance affordability in New South Wales, an issue that is being discussed around kitchen tables and in small businesses around the state.”
Commenting on the ESL reform, the Actuaries Institute highlighted the home insurance affordability and availability issues in Australia.
“Underinsured and uninsured households have significantly less capacity to cope with adverse weather events and natural disasters, which reduces the resilience of communities. Abolishing ESL and replacing it with a fairer tax should help improve resilience,” said Actuaries Institute CEO Elayne Grace in a release.
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