Policyholders set to save big on premiums as Minns vows to scrap emergency service tax

Premier Chris Minns will wipe the Emergency Services Levy off home insurance premiums, to redistribute the cost statewide in a bid to make the system fairer and reduce the cost-of-living burden.

Premier Chris Minns will wipe the Emergency Services Levy off home insurance premiums, to redistribute the cost statewide in a bid to make the system fairer and reduce the cost-of-living burden.

In a move that will save hundreds if not thousands of dollars for people taking out home and contents insurance, Mr Minns will use today’s The Daily Telegraph Bradfield Oration to declare reform of the Emergency Services Levy is long overdue.

The sweeping changes will lower the cost of skyrocketing premiums encouraging more property owners to take up critical insurance policies.

Currently, emergency services are funded through a tax on people who take out insurance: if fewer people take out insurance policies, the cost of the emergency services levy increases for those who are insured.

It comes as analysis of insurance costs by the Telegraph found that scrapping the Emergency Services Levy could save customers in Windsor more than $500 on a policy for a home at the median house price.

Premier Chris Minns ahead of the 2023 Bradfield Oration. Picture: Richard Dobson

Policy premiums for an average-priced Parramatta home could be about $170 cheaper, while policyholders in the flood-prone Northern Rivers could save more than $2000 on premiums for coverage a median-priced home.

Mr Minns will use his Bradfield Oration speech to say that funding emergency services by an insurance tax is unsustainable.

The Minns government will next year launch a consultation paper to explore how emergency services can be funded without the levy.

“For too long this has been in the too hard basket for NSW,” Mr Minns said.

“But as we face the threat of more natural disasters, we have a significant opportunity to make the system fairer and more sustainable for the future.”

Under the existing model, insurance policyholders pay more than 70 per cent of the cost of the emergency services agencies.

The Emergency Services Levy increases the cost of home insurance premiums by as much as 18 per cent. For businesses, the levy increases costs by an average of 30 per cent.

In flood prone Lismore, scrapping the ESL could make insurance premiums thousands of dollars cheaper. supplied

According to Insurance Council of Australia data, as much as 13 per cent of NSW households are uninsured.

The former Coalition government planned to replace the Emergency Services Levy in 2017 with a new fee based on land values, but was forced into a backflip.

At the time, then-Premier Gladys Berejiklian said scrapping the ESL would have “unintended consequences”.

Treasurer Daniel Mookhey said that reforming the emergency service levy was one way the government could help ease the cost of living crisis.

“Far too many homeowners run the risk of leaving their biggest asset uninsured because of soaring costs.

“The NSW Government will begin consultation across industry and the wider community. It’s not a reform that can be rushed – it’s too important to get it right.”