Emergency Services Levy: What tax Premier Chris Minns promised to scrap is costing you
Premier Chris Minns promised last year to scrap a hefty tax that was costing families and businesses hundreds of dollars. Six months on we are still being slugged. See how much it is costing you.
NSW
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Families are being slugged an extra $305 on their home and contents insurance premiums and businesses are paying up to $1200 more to cover a state government tax that Premier Chris Minns has vowed to scrap.
The Daily Telegraph can reveal the average costs the Emergency Services Levy (ESL) is adding to families’ hip pockets, almost six months on from when the Premier declared he would find a fairer way to fund the state’s emergency services.
New analysis from the Insurance Council of Australia, contained in a pre-budget submission to NSW Treasury, has found that the cost of funding the state’s emergency services falls disproportionately on those who can least afford it.
Mr Minns announced plans to scrap the tax at The Daily Telegraph’s Bradfield Oration last year.
The ICA data found that the ESL directly adds, on average, $252 to yearly home and contents premiums. For commercial building and contents policies, it adds $633, and for commercial building policies it is adding $922 every year.
After stamp duty and GST are applied, the ESL adds $305 to home and contents policies, $766 for commercial building and contents policies, and $1,200 for commercial building insurance.
The tax funds NSW’s emergency services, including Fire and Rescue NSW, the NSW Rural Fire Service and the NSW State Emergency Service.
The ICA has previously warned that the cost of the ESL is forcing an increased number of people to be uninsured.
Because the tax is only paid by policyholders, it gets more expensive if fewer homeowners take out insurance.
While the Minns government has been consulting on a way to replace the tax with another funding mechanism, no decisions have yet been made.
A “Stakeholder Reference Group” established in an attempt to find an alternative solution held its first meeting in March.
Former Premier Gladys Berejiklian tried to replace the ESL with fees based on land-values in 2017, but was forced into a backflip.
ICA Chief Operating Officer Kylie Macfarlane said the data highlights “how much this unfair tax is impacting the pockets of policyholders across the state and their ability to obtain appropriate cover.”
“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.”
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