The NSW Government has today (30 May) delayed introducing the Fire and Emergency Services Levy (FESL) indefinitely after concerns that small and medium businesses might face an “unreasonable burden”.

“We are a government that listens, and we have heard the concerns from the community, and we will take the time to get this right,” said NSW Premier Gladys Berejiklian in announcing the government’s latest decision.

“While the new system produces fairer outcomes in the majority of cases, some people – particularly in the commercial and industrial sectors – are worse off by too much under the current model, and that is not what we intended.”

The government had planned to abolish the Emergency Services Levy, currently added to home building, contents and some motor insurance premiums, on 1 July and legislation had already been passed to give it effect.

Under what was to be the new NSW FESL, the state’s firefighters and the State Emergency Service will be funded through a property-based levy, that is, council rates.

NSW Treasurer Dominic Perrottet said the reform was complex and it was important to ensure families and businesses are not placed under “unfair strain”.

NIBA CEO Dallas Booth said: “It is not yet clear what will happen in relation to ESL levy on insurance premiums after 1 July 2017.  NIBA expects to attend a meeting with the Government and insurers later this week to discuss the issue.”

NSW would have been the last mainland state to abolish the ESL, which has accounted for a 20 per cent increase in insurance premiums for NSW households, driving the cost of home and contents cover higher than any other state or territory in Australia.

The government will now work with local government, fire and emergency services, the insurance industry and other stakeholders to find a “better and fairer path forward”.