Recent findings released by the Insurance Council of Australia (ICA) shed light on the disproportionate financial burden borne by insurance customers in New South Wales (NSW), particularly concerning the Emergency Services Levy (ESL). According to the ICA’s submission to the NSW Treasury, NSW residents face an average additional charge of $305 on home and contents policies due to the ESL, a burden not experienced to the same extent in other states.
The ICA’s analysis of insurers’ pricing data exposes the direct impact of the ESL, with an average yearly addition of $252 to home and contents policies, $633 to commercial building and contents policies, and $922 to commercial building policies. When compounded with GST and stamp duty, these figures escalate to $305, $766, and $1,200 respectively, exacerbating the financial strain on policyholders.
Moreover, the ICA underscores the inequity inherent in the ESL’s design, asserting that it disproportionately affects those least equipped to afford it and fails to accurately reflect the potential demand for emergency services.
Kylie Macfarlane, Chief Operating Officer of the Insurance Council of Australia, lauded the decision of the Minns Government to abolish the ESL, emphasizing the positive impact it will have on insurance affordability in the state. Macfarlane expressed optimism regarding the opportunity to engage in the consultation process aimed at replacing the ESL with fairer funding mechanisms for emergency services.
Macfarlane stated, “The removal of the ESL will significantly enhance insurance affordability, encouraging more families and businesses to secure cover for their most valuable assets and be protected when the unexpected occurs.”
The Insurance Council commends NSW Treasurer Daniel Mookhey for his leadership in driving discussions to reform the ESL, affirming their commitment to actively participating in this critical reform process.
You Might Be Interested In
