The Back Story
This taxing system has been contentious for years and in all Australian states but NSW, the tax has been removed from insurance premiums. In the past decade, a royal commission, two state government reviews and a number of commissioned studies have acknowledged the link between insurance taxes and the alarmingly high incidence of underinsurance and – even worse – non-insurance in Australia. It became troublingly clear when the fires of Black Saturday ripped through communities in rural Victoria in 2009 and many residents and businesses did not have the insurance to recover without assistance. Victoria, followed by other states, introduced the new system making property owners responsible through their Council rates.
Previously, the cost of the levy fell entirely to those able and prudent to pay for full property insurance.
In 2016, the NSW announced it would follow suit. And then it didn’t. Unexpected costs and consequences primarily to commercial businesses were the main reasons Premier Gladys Berejiklian gave for retracting its promise.
What Can You Do About This?
What all this effectively means is that those paying for appropriate property insurance, both residential and commercial, are footing the bill for emergency services. There are efforts to continue lobbying the NSW government — the Insurance Council of Australia initially pushed for the change and expressed its “shock and disappointment” when the decision was called off. Premier Berejiklian has said that the NSW hopes to introduce a fair system for all in the future.
The answer, however, is not to skip insurance. Currently, in NSW, Victoria and Tasmania, emergency services may present individuals and businesses with charges when there is no insurance in place. Not to mention the costs and consequences of being underinsured in the face of any unforeseen accidents — from small fires to natural disasters such as flooding.
Contact a Westlawn advisor who can help you understand your appropriate property insurance needs and options.
Sydney Morning Herald: NSW Fire Services Levy Delayed
NSW Treasury Department: Fire and Emergency Services Levy
No Tax On Insurance
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