Councils lobby for say in emergency services levy reform

It followed the state government's announcement on Thursday, November 16 of what it described as "long overdue reform of the levy to ensure fairer and more equitable distribution."

READ MORE: Goulburn Mulwaree Council hits out at emergency services levy hike

The reforms would create a state-wide funding regime for funding emergency services, "rather than the burden falling on only those who took out insurance".

"This is recognition that natural disasters affect everyone in NSW, and there is a collective benefit in having fully funded, well prepared and resourced emergency services," a spokesman said.

Consultation will soon begin on the reforms.

Local Government NSW president, Darriea Turley AM, said a review was necessary but she cautiously welcomed the announcement.

"Councils have been shouldering the burden of the increased cost of emergency services for too long," she said.

"This has made it incredibly difficult for councils to budget and provide the services ratepayers expect."

ALSO READ: 'We didn't start the fire': Landowners hit out at Curraweela response

Currently, the state's 128 councils collect 11.7 per cent of the finances which fund emergency services - Fire and Rescue, the Rural Fire Service and the State Emergency Service. The money is collected through council rates.

"Collecting the levy via council rates has to stop," Cr Turley said.

She noted that Premier Chris Minns' speech made no mention of decoupling the levy from rates. Moreover, it cost councils to collect the revenue, which couldn't be levied on all types of land.

"I hope this was just an oversight and not an indication that council rates will continue to be cannibalised by the levy," she said.

Goulburn Mulwaree Council will pay $404,000 for the levy this financial year. It had increased $67,000 annually since 2018/19, a newsletter stated.

The council is among many calling for a shake-up of the way the levy is collected.

Under the existing model, insurance policy holders contribute 73.7 per cent of the ESL.

Councils chip-in 11.7pc and the state government - 14.6pc.

ALSO READ: Police arrest four people after vehicle search at service station

The government says NSW is the only mainland state that uses a levy on insurers to fund emergency services.

"It means Insurance companies build the ESL cost into their base premiums, driving up the cost of insurance," a spokesperson said.

The levy is estimated to increase the cost of household insurance by an average 18pc. Commercial premiums had risen by 30pc.

The government maintains that the current model has left NSW with the "highest level of uninsured homes in the country."

ALSO READ: Council revises original rate proposal to 'spread the load'

An estimated 17.6 per cent of NSW homes did not have home and contents insurance, "risking great loss during a natural disaster because of unaffordable premiums."

"And as natural disasters increase, costs will only rise," a spokesperson said.

"Without reform, this will perpetuate a cycle where fewer people will be able to afford insurance on their biggest asset - their home - and it leaves a smaller pool of people to pay the rising ESL, further increasing the cost."

Consultation will soon begin with industry and stakeholders. A discussion paper will be released in coming months as part of the process.

Treasurer Daniel Mookhey's office had not returned comment at the time of publication on whether the consultation would include councils.

In a statement, Premier Chris Minns said the reform was "the right thing to do."

"For too long this has been in the too hard basket for NSW," he said.

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

Our journalists work hard to provide local, up-to-date news to the community. This is how you can access our trusted content: