Old way of funding fire fighting needs to be torched (Sydney Morning Herald, 7 March 2017)

Fairer funding for Fire and Emergency Services
March 7, 2017
New scheme to deliver cheaper green slips in 2017
March 8, 2017

Old way of funding fire fighting needs to be torched (Sydney Morning Herald, 7 March 2017)

The system for funding the vital work of our fire and emergency service workers and volunteers is far from fair.

It dates all the way back to 1666 and the Great Fire of London, where widespread devastation prompted insurance companies to establish the very first fire brigades whose job was strictly to protect customers with paid-up insurance.

That meant if you weren’t insured, there’d be no firies on hand if your house went up in flames.

Imagine if our fire fighters did the same today.

And yet 350 years after the Great Fire – and half a world away – the way we fund our fire and emergency services in NSW is the same: the bulk of funding is still paid only by people with insurance, via a levy charged on top of their insurance premiums.

Even though everyone in every corner of NSW can depend on the help of emergency services in times of need, not everyone pays – only those with insurance.

That simply isn’t fair.

That is why this week the NSW Government will introduce legislation for a fairer way of funding emergency services.

The legislation will introduce a land-based levy – which we first announced in 2015 – so everyone who owns a property and depends on the protection of emergency services workers pitches in, not just those with insurance.

The “Fire and Emergency Services Levy” will be calculated on unimproved land values, and properties will be broken down into classifications: residential, farmland, industrial, commercial and public benefit land.

Owners of residential and public benefit land will pay lower rates, and vacant land will have a discount applied. There will also be discounts available for pensioners and veterans, and a hardship policy for those who need it.

Councils will be responsible for administering the new scheme, which applies from July 1 this year, and from May 1, property owners will be able find out how much they will pay by visiting www.fesl.nsw.gov.au.

The old levy that was tacked on to insurance premiums will disappear, so insurance premiums for property will fall by an average of just under 20 per cent, or $233.

That means, on average, a fully-insured residential property owner will be better off by about $47 a year following the reform.

The old insurance levy will also come off home contents, personal effects, motor vehicle, marine, baggage, crop and livestock insurance.

To make sure insurers pass on savings to consumers, former competition watchdog Professor Allan Fels and Professor David Cousins have been appointed insurance monitors.

They will have the power to fine insurers up to $10 million for not passing on the savings to property owners.

NSW has the highest rate of underinsurance in Australia – for example around 36 per cent of households don’t have contents insurance – and we are confident that removing the old levy from insurance bills will encourage more property owners to take up insurance.

The move from an insurance-based levy to a fairer land-based levy is something all other mainland states have put into place, and it’s something both the Henry Tax Review (in 2010) and the Royal Commission into the Victorian Bushfires (in 2009) recommended.

So it’s high time we made the changes here too.

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