NSW Treasurer Daniel Mookhey says abolishing the emergency services levy on insurance won’t be easy – but with the industry’s help, the reform can get over the line.

The levy adds significant amounts to business premiums and the insurance industry has been fighting to have it axed for decades.

A previous attempt at reform was abandoned in 2017.

In late 2023, the NSW government announced that a fairer system would be introduced, but progress has been slow. The reforms were referred in March to a parliamentary committee inquiry, which is looking at property-based alternatives.

“Funding emergency services through a tax on insurance means the people who insure their property pay for the people who don’t,” Mr Mookhey said.

“It punishes the prudent. It drives up premiums ... Every serious person who has looked at it, for two decades, has reached that conclusion.”

He told the Insurance Council of Australia Annual Dinner in Sydney on Wednesday that “several governments” have tried to push through reform, but “all of them stopped”.

“We don’t want to stop,” he said. “I won’t pretend the last stretch is the easy part. Reform like this only works if it’s built to outlast the government that builds it. That means bipartisanship, and bipartisanship takes time, so we’re taking the time to get it right.

“You’ve waited 20 years for this reform. I’m asking you to wait slightly longer.”

In discussion with ICA CEO Andrew Hall, Mr Mookhey stressed the importance of the industry continuing to speak up for reform – to counter likely resistance. insuranceNEWS.com.au reported a negative reaction to the reform from the state opposition earlier this year.

“It was encouraging to hear recognition of the importance of maintaining bipartisan support to help deliver this long-held reform objective and improve insurance affordability for households and businesses across NSW,” Mr Hall said afterwards.

ICA deputy chairman Richard Feledy also flagged the ESL reform in his speech, calling it an opportunity that must not be passed up.

“The ESL remains one of the clearest examples of a tax that increases the cost of insurance,” he said.

“It makes protection between 10% and 34% more expensive for households, businesses and motorists at a time when affordability is already under significant pressure.”

He acknowledged progress made, and the state government’s commitment to reform.

“After talking about this issue for many years, we now have an opportunity to deliver meaningful reform. We can’t afford to miss it.”

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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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