The NSW Government has decided to defer any reform of the Fire and Emergency Services Levy for at least four years.
Responding to recommendations from a NSW Parliament Legislative Council report, NSW Treasurer, Dominic Perrottet stated, “The NSW Government has no plans to introduce a revised Fire and Emergency Services Levy in the next term of government.”
NIBA CEO Dallas Booth has said that this is a very disappointing outcome, given the number of Royal Commissions and inquiries that have called for the abolition of the levy on insurance premiums, and the impact that the levy has on the cost of property insurance for NSW properties.
“NIBA will continue to lobby for change to this unjust and inequitable tax. Everyone accepts that it is totally unfair for the emergency services to be funded by those who take out insurance cover, while those who make other arrangements get the benefit of the emergency services without making any contribution towards the cost of those services.”
The levy on insurance premiums was totally removed by insurance companies in the lead up to May and June 2017, but had to be reinstated again when the Government decided not to proceed with the change to a property based levy. All other mainland States and Territories changed to property levies years ago, with very little community backlash or concern.
Property insurance premiums in NSW now carry three taxes and charges – GST, stamp duty and the FES Levy, increasing the cost of domestic insurance by over 20 per cent and increasing the cost of commercial property insurance by over 50 per cent.
Booth said that taxes of this magnitude are usually only imposed to discourage activity in the community. “The recent storms and past floods and fires have shown time and again the value of full insurance cover in times of hardship and loss. We should be promoting full insurance cover against loss and damage to property, not imposing penalty taxes and charges on people trying to do the right thing and protect their assets.”