New independent economic analysis found reforming the NSW Emergency Services Levy would put more money in the pockets of over 2 million households and save $500 million in economic costs across the state.
The current levy adds up to 18 per cent to household insurance premiums and up to 34 per cent for businesses, with stamp duty and GST applied on top. The analysis, commissioned by the Insurance Council from Lateral Economics, was submitted to the NSW Select Committee on Emergency Services Funding Reform, which is examining alternatives to the existing levy and is due to report by November.
The report found a broad-based property charge would be fairer and more efficient, delivering up to $460 million in annual welfare gains. While most NSW households would save at least $55 a year and small businesses around $70, the analysis found households in disaster-prone regional areas, where premiums already sit well above the state average, would save around $565 a year, rising to $600 with a 20 per cent regional discount. Pensioner households could save around $125 a year, rising to $185 with a discount, while strata households could save between $91 and $136 a year.
Small and medium businesses were found to have the most to gain, with savings ranging from $105 a year for a small bakery to $8,850 for a restaurant and more than $21,000 for a small livestock farm. The analysis also found reform would make insurance more accessible, enabling 82,000 additional households to take out building insurance and 320,000 more to take out contents insurance.
The Insurance Council is calling on NSW parliamentarians from all parties to work together to deliver the reform, describing it as critical and overdue.
