The Insurance Council welcomes the proposal to reform the emergency services levy.

The Insurance Council of Australia (ICA) has expressed strong support for the New South Wales Government’s announcement to reform the Emergency Services Levy (ESL) via a Parliamentary inquiry. The move marks a significant step towards establishing a fairer and more sustainable system for funding emergency services across the state.

After extreme weather risks, taxation represents the second-largest component of insurance premiums in New South Wales. In the 2024–25 financial year, the Government is set to collect approximately $1.3 billion directly from policyholders through the ESL.

Currently, the levy is calculated in proportion to insurance premium costs. As a result, households with higher premiums—often due to elevated exposure to natural hazards such as floods or bushfires—bear a disproportionately larger tax burden. This inequitable system primarily affects those least able to pay. According to the ICA, roughly 70 per cent of households in areas with the highest flood risk reside in regions where the median income falls below the national average. Alarmingly, about 35 per cent of these households are located in areas with a median income below the poverty line.

Treasurer Daniel Mookhey announced the Parliamentary inquiry today, signalling a commitment to addressing the inequities in the current funding model. The ICA has welcomed the initiative, describing it as a genuine opportunity to construct a system that recognises that emergency services protect all residents, not solely those who hold property insurance.

ICA CEO Andrew Hall emphasised the importance of reform:

“The announcement by Treasurer Daniel Mookhey represents a vital step towards fairer emergency services funding in New South Wales. The current model has been repeatedly identified by independent reviews as both unfair and unsustainable. We are committed to working collaboratively with the Government and Parliament to design a framework that enhances affordability while ensuring the long-term sustainability of emergency services.”

The ICA has confirmed it will engage actively in the Parliamentary inquiry, aiming to contribute to policy solutions that are equitable for both households and businesses throughout New South Wales. The reform process is expected to explore alternative funding models that could distribute costs more evenly and reduce the financial burden on the most vulnerable communities, ensuring all residents benefit from effective emergency services.

By tackling these longstanding inequities, New South Wales has the opportunity to set a precedent for fair and sustainable emergency service funding across Australia.