(NSW) Remove the Emergency Services Levy on Home and Contents Insurance Premiums
Author: Charlie Byrne, Roanna Harry, Nathan Coldrey, Daniel Kim, Noah Tolmie, Scout Salathiel, Charlotte McHarg, Vishwas Varghese & Benedict McGirr | Publish date: 20/10/2026
P: In NSW, there is an insurance-based levy to fund Emergency Services.
S: The Treasurer of NSW should repeal Sections 6 and 7 of the Emergency Services Levy Act 2017 (NSW) to omit an ‘emergency services insurance contribution’ on relevant insurance, replacing it with a levy on Council rate notices.
E: Strata Community Association (NSW) (2026): ‘We believe that the levy should be collected through Council rate notices … [to] replace the insurance-based levy with a property-based funding model, bringing New South Wales into line with every other state and territory in Australia’.
Problem Identification:
Section 6 and Section 7 of the Emergency Services Levy Act 2017 (NSW) outline that ‘emergency services insurance contribution is payable in … premiums for relevant insurance’ and that ‘an insurer … is required to pay the contribution.’
Bellrock Advisory noted that people are ‘discouraged from procuring adequate insurance coverage … due to the increased financial burden of the [Emergency Services Levy (ESL)]’.
Context:
According to QBE Insurance, the ESL refers to a tax which ‘provides funding for emergency services in NSW … Insurers regularly contribute … [through] residential and commercial property policies’. Property insurance provider Chubb stated that the NSW ESL ‘is applied as a percentage against [an] insurance premium’. According to Revenue NSW, ESL rates vary and there is no ‘set percentage’.
According to the Independent Pricing and Regulatory Tribunal, insurers generally ‘pass on the cost to policy holders through a surcharge on insurance premiums.’
Insurance Australia Group (IAG) emphasised that NSW emergency services receive 73.7% of funding from the ESL and further highlighted that households will ‘pay $1.5 billion under the ESL in 2026-2027’.
In 2026, the NSW Treasury released an options paper that highlighted possible alternatives, including a ‘levy model’. Further, there is now a parliamentary inquiry into the ESL that is due to hand down its report by November.
A property-based levy can refer to ‘a fixed charge based on [the] property classification’ which can ‘depend on … property type and value’.
Arguments:
Insurance Council Australia (ICA) CEO Andrew Hall stated that this ‘pushes people to cut back their cover or drop it altogether’. The ICA highlighted that the ESL annually adds ‘an average $252 to home and contents policies’, and further stated the current ESL adds ‘up to 18 per cent on top of household insurance premiums’. An ABC News article highlighted a case where a homeowner in Lismore faced a $269 ESL and decided to lower the value of her home ‘to make it more affordable [to live there]’.
Lateral Economics found the ESL ‘mak[es] coverage progressively less affordable for many households …, particularly those in more disaster-prone regions.’ The Financial Review stated that ‘in disaster-prone regional areas, premiums sit well above the state average.’ Allianz modelled a flood premium to insure $600,000 could cost $33,000, with a further 10% added for Stamp Duty, and for GST, bringing the premium to $39,930 post-tax, with the ESL adding 18 per cent of the $33,000 premium, totalling $45,000. Julia Davis from Financial Rights Legal Centre (FRLC) stated ‘vulnerable households get pushed into the highest risk areas and the least resilient housing.’
The ICA stated ‘NSW remains the only mainland state to fund its emergency services by taxing insurance customers.’ Strata Community Association (SCA NSW) President Robert Anderson highlighted homeowners in NSW pay ‘up to three times more’ than Victorians. For example, the ICA demonstrated that on a $1,000 premium, NSW residents would pay an additional $180 in state taxes through the ESL, totalling $297, compared to a total of $110 for Victorians. The ICA emphasised the ESL is ‘an antiquated system of funding’.
Advice/Solution Identification:
FRLC, ICA and SCA (NSW) have called for the removal of the ESL on insurance premiums, moving to a broader property-based levy. ICA COO Kylie Macfarlane stated that ‘the removal of the ESL will significantly enhance insurance affordability’.
Precedent:
There is domestic precedent for removing the ESL on insurance premiums. All other mainland states and territories (VIC, SA, WA, QLD, NT, and ACT) have removed the insurance-based ESL, and substituted it with a broad property-based levy.
Public Support of the Solution:
(This list reflects publicly stated positions and should not necessarily be taken as endorsement of this specific brief.)
News Coverage:
ABC News - “Calls to scrap NSW emergency services levy as insurance costs rise”. This article highlighted the struggles homeowners face in paying their insurance premiums, with rising costs due to the additional ESL. By: Adelaide Miller | 4 August 2026 - Read the article here.
Australian Financial Review - “A $565 insurance saving in the regions could sting rich households”. This article discussed the 5 proposed models that the NSW Treasury are considering in place of the current ESL scheme. By: Paul Karp | 9 July 2026 - Read the article here.
Sydney Morning Herald - “NSW Property owners face new tax to fund emergency services”. This article discussed changes to the ESL with a focus on the impact on property owners. By: Max Maddison | 17 May 2026 - Read the article here.
ABC News - “Politicians criticise insurers, while governments reap billions in taxes on premiums”. This article discussed the impacts of the flood in Lismore on property owners’ insurance premiums, and the increase of premiums as a result of the ESL. By: Michael Atkin and Loretta Florence | 12 March 2025 - Read the article here.
Where to go to learn more:
(2026) NSW Emergency Services Levy Economic Modelling | Insurance Council of Australia - This report was commissioned by the Insurance Council of Australia to demonstrate the negative economic effects of the current NSW Emergency Services Levy. It modelled how transitioning to a broad property-based tax would work and, comparatively, the extent of the benefit from transitioning to that potential levy scheme. This report recommended substituting the insurance-based method with a broader property-based levy. Read the report here.
(2026) IAG Submission to NSW Legislative Assembly Select Committee on Emergency Services Funding Reform | IAG - This report was submitted by Insurance Australia Group to the NSW Legislative Assembly Select Committee on Emergency Services Funding Reform. It noted 4 major areas that IAG finds changes to the ESL would have the most impact, and also features a case study. Read the report here.
(2026) Emergency services funding reform: Options paper | NSW Treasury - This options paper was created by the NSW Government for the purpose of explaining the rationale behind reforming the Emergency Services Levy. It detailed the 5 replacement options being considered by the Select Committee for implementation, and the pathways to transition while considering the positions and feedback of all appropriate stakeholders. Read the options paper here.
Emergency Services Levy Act 2017 (NSW) - Read the full Act here.
Human Perspective:
Nick is a young man who has bought his first house in regional NSW to be close to his aging father, Steve. His property is in an area prone to severe storms, so Nick has been worried about what he will need to do to protect his home. His father helped him choose an appropriate home and contents insurance policy to cover the house. When Nick was reviewing the invoice he had received, he noticed there was an Emergency Services Levy contribution, which was an extra 18% on top of his premium. Having bought his first house, Nick was already carefully managing his money, and this levy only deepened his worries about his financial management. To reduce the price of his premium, Nick knew he would have to raise his policy excess in future. He knew he would have to pay a lot more if a severe storm damaged his home. He was caught between whether to pay more for insurance that he needs because of where he lives, or go without insurance, as this levy would continue to be a financial burden. He believes that both options are unsustainable.
To protect the anonymity of those involved, this is a fictionalised account drawn from an amalgamation of real-life stories, experiences and testimonials gathered during the research process for this brief. Any resemblance to actual individuals is purely coincidental.
Conflict of interest/acknowledgment statement:
N/A.
Support
If your organisation would like to add your support to this paper or suggest amendments, please email hello@foregood.org.au.
Disclaimers
Please review all FORE disclaimers here.
Reference list:
Allianz. (2023, November). Inquiry into Insurers’ Response to the 2022 Floods. https://www.aph.gov.au/Parliamentary_Business/Committees/House/Economics/FloodInsuranceInquiry/Submissions#:~:text=13-,Allianz%20Australia%C2%A0,-(PDF%206485%20KB
Bellrock Advisory. (2024, May 7). Changes to the Emergency Services Levy and impacts for property owners. https://bellrockadvisory.com/changes-to-the-emergency-services-levy-and-impacts-for-property-owners
Chubb. (n.d.). NSW Emergency Services Levy. https://www.chubb.com/au-en/customer-service/nsw-emergency-services-levy.html
Financial Counselling Australia and Financial Counsellors’ Association of NSW. (2026, June 19). Emergency Services Funding Reform [Submission 54]. https://files.parliament.nsw.gov.au/fileapi/ParlFiles/GetArtifact/Submission%2054%20-%20Financial%20Counselling%20Australia.pdf?serverRelativeUrl=%2Fladocs%2Fsubmissions%2F95378%2FSubmission%2054%20-%20Financial%20Counselling%20Australia.pdf
Financial Rights Legal Centre. (2024, May 22). Reforming the emergency services funding system: Consultation paper. https://financialrights.org.au/wp-content/uploads/2024/06/240522_ESLLevy_Sub_FINAL.pdf
Independent Pricing and Regulatory Tribunal. (2024, October). Emergency Services Levy Insurance Monitor: Quarterly report. https://www.ipart.nsw.gov.au/sites/default/files/cm9_documents/First-quarterly-report-Insurance-Monitor-October-2024.PDF
Insurance Council of Australia. (2026, June 23). NSW Budget: Rising insurance taxes build case for ESL reform [Media release]. https://insurancecouncil.com.au/resource/nsw-budget-rising-insurance-taxes-build-case-for-esl-reform/
Insurance Council of Australia. (2024, June 3). NSW insurance customers bear heavy burden of ESL [Media release]. https://insurancecouncil.com.au/resource/nsw-insurance-customers-bear-heavy-burden-of-esl/
Insurance Council of Australia. (2026, July 7). New analysis backs a fairer way to fund NSW's emergency services [Media release]. https://insurancecouncil.com.au/resource/new-analysis-backs-a-fairer-way-to-fund-nsws-emergency-services/
Insurance Council of Australia. (2019, November). The Impact of Government Duties on Household Insurance. https://insurancecouncil.com.au/wp-content/uploads/resources/ICA%20reports/2019/112219_ICA_Paper_Impact-Govt-Duties-Household-Insurance.pdf
Insurance Australia Group. (2026, July). NSW Legislative Assembly Select Committee on Emergency Services Funding Reform [Submission]. https://www.iag.com.au/content/dam/corporate-iag/iag-aus/au/en/documents/submissions/iag-parliamentary-submission-esl-july-2026-web.pdf
Insurance Australia Group. (2026, July 7). IAG submission to the NSW Legislative Assembly Select Committee on Emergency Services Funding Reform. https://www.iag.com.au/government-submissions/iag-submission-emergency-services-levy-nsw
Karp, P. (2026, July 9). A $565 insurance saving in the regions could sting rich households. Financial Review. https://www.afr.com/politics/a-565-insurance-saving-in-the-regions-could-sting-rich-households-20260709-p60e31
Kerr, L. (2026, August 4). SCA (NSW) joins the call to scrap the insurance tax. Strata Community Association NSW. https://scansw.com.au/news/sca-nsw-joins-the-call-to-scrap-the-insurance-tax
Lateral Economics. (2026, June). NSW Emergency Services Levy Economic Modelling: A Lateral Economics report to the Insurance Council of Australia. https://insurancecouncil.com.au/wp-content/uploads/2026/07/Attachment-Lateral-Economics-ESL-Report-2026.pdf
NSW Treasury. (April, 2026). Emergency services funding reform [Options paper]. https://www.nsw.gov.au/sites/default/files/noindex/2026-05/nsw_treasury-emergency-services-funding.pdf
Parliament of New South Wales. (2026) Legislative Assembly Select Committee on Emergency Services Funding Reform. https://www.parliament.nsw.gov.au/parliamentary-business/committees/committee-details?committeeId=342
QBE. (n.d.). NSW Emergency Services Levy – update. https://www.qbe.com/au/industry-news-alerts/nsw-emergency-services-levy
Strata Community Association NSW. (2024, May 21). Reforming the Emergency Services Levy. https://scansw.com.au/wp-content/uploads/2025/09/SCA-NSW-Reforming-the-Emergency-Services-Levy-Submission-FINAL-21MAY24.pdf
Revenue NSW. (2026, August 11). Emergency services levy. NSW Government. https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/emergency-services-levy
Victorian State Revenue Office. (2026, May 22). Understanding the emergency services and volunteers fund. https://www.sro.vic.gov.au/owning-property/emergency-services-and-volunteers-fund/understanding-emergency-services-and-volunteers-fund#:~:text=a%20fixed%20charge,capital%20improved%20value
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