A promised drop to the cost of home insurance policies has been delayed, following changes to the Fire and Emergency Services Levy (FESL).
In a statement on Tuesday, Premier Gladys Berejiklian said the government would defer the introduction of the FESL to ensure small to medium businesses did not face an unreasonable burden in their contribution to NSW’s fire and emergency services.
Dubbo ratepayers were due to start paying the levy from July 1, collected by Dubbo Regional Council alongside the rates. It was a change from the levy being funded via those with home insurance.
However, Ms Berejiklian said while the model should have been fairer for all, it was found that some people, such as those in the commercial and industrial sectors, were worse off under the current model.
The Insurance Council of Australia said it was disappointed about the delay.
Spokesperson Campbell Fuller said resuming the old Emergency Services Levy (ESL) beyond June would create significant legal and commercial implications for the industry.
“It is a logistical and technical challenge that will cause confusion and increase premiums for policyholders,” Mr Fuller said.
“The resumption of ESL collection will come with significant additional costs that the industry will be forced to pass on in full to policyholders.”
The NSW Rural Fire Service Association (RFSA) said it wanted a guarantee firefighters would not be affected.
RFSA president Ken Middleton said he didn’t not want to see a reduction in the amount of money for rural firefighting services.
“If the government wishes to review the means of collecting the FESL that is their prerogative, but we have been provided with guarantees and we would not want to see those undertakings compromised by model changes,” Mr Middleton said.
Local Government NSW president Keith Rhoades said the delay provided a great opportunity.
“Councils have already done a lot of work to comply with the Government’s FESL legislation, and there will now be a need to undo this work – not to mention the associated costs,” he said.
“While this is regrettable, the chance to get the levy right should be our focus.”
Councils, fire and emergency services, the insurance industry and other stakeholders will be consulted on the new levy.