The NSW budget released today underscores the case for emergency services levy reform as collection forecasts escalate compared with projections a year ago, the Insurance Council of Australia says.

Emergency services levy collections for 2026-27 are estimated at $1.512 billion, rising to $1.665 billion the following year, then $1.629 billion and $1.456 billion.

ICA CEO Andrew Hall says the figures show why the state government’s inquiry into levy reform matters, with policyholders in line to pay more the longer it takes to introduce change.

“The cost of the ESL to insurance policyholders over the next four years will be half a billion dollars more than previously forecast in last year’s budget,” he said. “A tax this size pushes people to cut back their cover or drop it altogether, which leaves more families and businesses exposed when the next flood or fire hits.”

Across the forward estimates, NSW will collect more than $3 billion a year from insurance levies and duties.

Business NSW has welcomed signs of fiscal discipline, including a smaller than expected deficit, but says it has not delivered direct relief for companies.

The group has called on the government to cut the emergency services levy, which it says adds 23% to general business insurance premiums.

It says a two-year workers’ compensation premium freeze will result in 340,000 businesses avoiding a combined $4.1 billion in forecast premium increases.

In March, the government referred its proposed ESL reform to a parliamentary committee inquiry, which is looking at property-based alternatives.

Submissions on a Treasury options paper released in conjunction with the inquiry closed last Friday and the committee is due to report by November 18.

The NSW election will be held next March.

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From the latest Insurance News magazine: Could NSW's latest bid to reform the emergency services levy go down in flames?

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