The Insurance Council of Australia (ICA) says last week’s NSW state budget was a “missed opportunity” to cut insurance taxes and encourage greater uptake of cover.  

Stamp Duty and an Emergency Services Levy (ESL) “must be dealt with in future budgets,” ICA says. 

NSW is the only mainland state to still impose an ESL to fund emergency services, and insurance customers there pay nearly three times the amount of state taxes as their Victorian counterparts, contributing to an estimated 13% of NSW households being uninsured – double the rate in Victoria.  

“The best way to improve disaster resilience is to improve insurance coverage, and [the] budget is a missed opportunity to progress much needed reform of insurance taxes in NSW,” ICA Acting CEO Kylie Macfarlane said. 

NSW has the highest rate of insurance taxes in Australia, with customers paying 20-40% in state taxes on top of their premium, ICA says. Stamp Duty is forecast to raise $6.8 billion, and the ESL $5.1 billion, over the next four years – or around $1 in every $15 of all forecast tax revenue. 

Ms Macfarlane welcomed new government funding for initiatives to improve disaster resilience, including a new $150 million Community Restoration Flood Fund to support disaster impacted communities in the Northern Rivers and Central West. 

The fund will help development of Priority Disaster Adaptation Plans, work on bridges and roads, financing the ongoing Resilient Homes Program in the Northern Rivers, and aiding further housing programs.  

Funding was also made available for early warning systems for fires and floods, bushfire reduction teams, and deployable internet and mobile phone coverage during and after disasters.  

The NSW Government says it has allocated $2.3 billion over five years to improve natural disaster resilience. More than 60 declared disasters since 2019 have cost the state $5 billion. Last year, 20,000 homes were damaged.