Treasurer Mike Baird today said the Fire Brigade Employees Union’s (FBEU) claims regarding proposed changes to the funding of emergency services in NSW are inaccurate and misleading.
“The FBEU’s claims that insurance companies have historically funded our emergency services are wrong,” said Mr Baird.
“Insurance customers are the ones who really pay the levy, as insurance companies simply pass it on. This has just increased insurance premiums, causing some people to under-insure and others not to insure at all.
Mr Baird said funding currently comes from three sources, with the bulk of funding (73.7 per cent) provided by a tax on insurance premiums, while the remainder of the funds are provided by local governments (11.7 per cent) and the State Government (14.6 per cent).
“The fact is, those who pay for insurance are already paying for our emergency services and we are simply looking to develop a fairer and more efficient way to fund it.
“The current system is unfair because people who are either not insured or are under-insured do not contribute their fair share of funding of our emergency services, but still receive the same coverage as those who do pay full insurance.
“NSW has the highest rate of non-insurance for Australian property owners. Based on the current system, NSW property owners who insure their properties are subsidising the 36 per cent of households who don’t have home contents insurance.
“We think it would be fairer for every household in the State if everyone made a contribution to our emergency services to spread the costs across the whole community.
Mr Baird said recent reviews of the state tax system, including the Henry Tax Review, recommended NSW move to a property based levy.
“The FBEU’s claims that a move to a property based levy would see households paying more are completely misleading. Based on the experience in other states, removing the insurance levy and replacing it with a property based levy would actually reduce premiums and leave insurance holders better off.
“The Government has made no final decision about the shape of the levy. In fact, we recently extended the consultation period to the end of this month to give people more time to have their say, so the FBEU’s scare campaign has no substance.
“Whatever the shape of the levy, there will be no change to the total level of funds currently provided for fire and emergency services,” said Mr Baird.
The Discussion Paper and public submissions can be found at: www.haveyoursay.nsw.gov.au/ESL
The public consultation period is open until 31 October 2012.