Property owners to pay for NSW emergency services, state confirms

“In November 2023, the NSW government committed to reform the emergency services funding system. The resourcing requirements for the state’s emergency services agencies, largely funded by the Emergency Services Levy (ESL), are increasing with climate change and the growing instances of natural disasters, making insurance more unaffordable,” the budget papers stated.

“Under this reform, the government will remove the ESL on insurers and instead spread a replacement levy across a broad base of property owners,” it continued.

Acknowledging that the process has only just concluded its consultation phase, the state noted that it had already taken a number of steps to advance the reform, including appointing the Independent Pricing and Regulatory Tribunal to oversee the transition of the levy, to ensure that insurers pass on the savings from removing the ESL from that industry.

Additionally, amendments to the Emergency Services Levy Act 2017 have been made to authorise the Treasurer to request data from insurers about current ESL payments from policyholders and require councils to perform preliminary land classification activities.

Given these steps, it now appears certain that property owners will be the ones to wear the cost of emergency services, even though at the outset of the consultation process, property industry leaders were under the impression that no decisions had yet been made.

At the Property Council, NSW executive director Katie Stevenson sat on a stakeholder reference group to advise on the reform, though stated she entered into the process with the understanding that “no decisions had been made and everything was on the table to develop a fairer and more sustainable statewide system for funding our vital emergency services”.

With the news that the levy will be transferred to property owners, Real Estate Institute of NSW CEO Tim McKibbin described the move as “among the most reckless courses of action”, given the short supply of housing – particularly rentals – across the state.

“More tax on property owners means reduced investment in property,” he said.

“This government’s solution to the state’s economic woes is clearly and unashamedly singular: property owners must be able to afford it, so they can pay for it,” he added.