The National Insurance Brokers Association (NIBA) has provided a submission to the Royal Commission into National Natural Disasters Arrangements calling for a more holistic approach to disaster mitigation and the abolition of insurance-based taxes such as the Emergency Services Levy (ESL) in NSW and the Fire Service Levy (FSL) in Tasmania.
NIBA stated in the document that ensuring efficient emergency services funding models is vital to state and territory’s ability to respond to natural disasters.
The submission highlights the inequalities that exist between state funding models, which contribute to higher rates of under-insurance and non-insurance. The compounding of various state and federal taxes, which NIBA referred to as “inequitable and needlessly opaque” can account for up to 70 per cent of insurance premiums.
The Association maintained that, “Inefficient and poorly designed tax systems should not be stacked on top of each other for the sole purpose of collecting revenue at the expense of the public good.”
NIBA has called for a fairer more equitable emergency services funding model come at a time when many Australians are feeling financial pressure as a result of the COVID-19 outbreak and the black summer bushfires.
The submission urges the Commission to make a recommendation that New South Wales and Tasmania replace their current insurance-based funding models with a broad-based property levy, similar to the one introduced in Victoria following the 2009 Black Saturday bushfires.
NIBA’s submission also highlights the need for greater investment in public and private mitigation works, calling out that the current funding model provides little incentive for state and territory governments to invest in disaster mitigation as the Federal government shoulders most of the burden for disaster recovery.
NIBA said in the lodgement that many homes in bushfire prone areas were built prior to the introduction of bushfire-specific building standards and as such pose a higher risk. It recommended that in addition to greater investment in public mitigation, funds should also be allocated to increasing the resilience of older properties in bushfire prone areas.
You can access the submission in its entirety here.