An audit showing that consumers have benefitted from the removal of the fire services levy (FSL) on insurance policies in favour of a levy on all property owners has been released by the WA Government.

The audit was conducted by independent consultant Sigma Plus to ensure that insurers passed on savings to policyholders following the removal last year of the FSL.

The audit’s release is timely because the Public Accounts Committee of the NSW Parliament is due to report at the end of this month on alternative methods of funding for NSW fire services. 

The audit found that the removal of the tax contributed to WA having one of the most price-competitive insurance markets in Australia. Consumers responded by increasing their insurance cover to more adequately protect themselves at a lower total cost.

Sums insured increased by 7.2% over pre-FSL reform levels. Businesses were also buying greater amounts of insurance but for a lower total cost than in 2002.

Insurance Council of Australia Executive Director Alan Mason says the WA experience confirms that policyholders benefitted from the change, including purchasing higher levels of insurance. This means they are less likely to rely on government relief funds in times of disaster.

“Insurers have already agreed to be independently audited if the FSL is scrapped in NSW and this report should further allay any concerns about savings being passed on,” he said.