The NSW Government has released its 2021/22 Budget, forecasting insurance duty revenue will increase $46.1 million, or 0.9%, over the four years to 2024/25.

It says overall revenue from the Emergency Services Levy (ESL) including insurer and council contributions will be $1.1 billion in 2021/22 and $4.6 billion over the next four years.

The state will allocate an additional $268 million to fund proposed initiatives such as fleet replacement, personal protective equipment, mental health support and aerial fire-fighting and training.

The Budget papers released last week say insurers’ and councils’ ESL contributions are expected to provide $148 million over the next four years to pay for the NSW Bushfire Inquiry’s recommendations.

The Insurance Council of Australia (ICA) says it welcomes the increased allocation for bushfire mitigation measures but is disappointed with NSW’s inaction on insurance tax reforms.

ICA says the failure to address insurance taxes in NSW, which are the highest of all states and territories, means many property-owners will remain without adequate cover for their homes.

“In addition to imposing stamp duty on every policy purchase or renewal, NSW is the only mainland state that taxes insurance policyholders to fund fire and emergency services, and policyholders pay almost three times more in state insurance taxes than Victorians,” ICA said in a statement.

ICA CEO Andrew Hall again called for insurance tax reforms, relaying a similar message made when Queensland and Victoria released their state budgets in the past few weeks.

He says the effectiveness of the new investment for disaster and resilience is lessened by the failure to reform taxes and levies on insurance in NSW.

“Stamp duty on insurance is a retrograde revenue measure that numerous inquiries and reviews have found leads to household underinsurance or non-insurance,” Mr Hall said.

Key disaster-related funding initiatives from the Budget include:

• $5 billion in joint federal and state funding for bushfire response, recovery and preparedness efforts, with more than $460 million for the NSW Government’s response to the NSW Bushfire Inquiry, and $268 million in new funding to support vital projects
• $590.4 million for the Storm and Flood Recovery package which includes, in partnership with the Commonwealth, $215.3 million to clean up storm and flood impacted properties, $203.7 million for recovery programs and $171.4 million for disaster recovery grants to support small businesses, non-profit bodies and primary producers.

On Friday the NSW Government also announced councils will now be able to use a new planning provision that gives them the flexibility to help homeowners after a flood or bushfire.

It says under the Natural Disasters Clause, homeowners will no longer have to include formal requests to change development standards as part of their application, where planning rules have changed over time.

The clause was prompted by the recent floods and bushfires throughout the state.

“Planning rules change over time as new technologies emerge and as community expectations change,” Planning and Public Spaces Minister Rob Stokes said.

“This clause will let people rebuild homes approved under different rules in the past, so long as they meet safety and design standards.”