The Insurance Council of Australia (ICA) says it is “disappointing” that the 76 recommendations of the independent NSW Bushfire Inquiry report don’t address the Emergency Services Levy (ESL) and other insurance taxes.

ICA says increasing taxes on insurance products contribute to high levels of underinsurance and non-insurance.

However it says the report overall is “a positive step” and welcomes Recommendation 28 which suggests subsidies should be considered to encourage property owners to reduce their bushfire risk. This could result in reduced premiums.

“Insurers are encouraged by the detailed focus on planning and mitigation, as suggested in Recommendation 28, and look forward to working with government to explore measures that may be feasible, meaningful and measurable,” an ICA spokesman said.

“However, ICA is disappointed the final report did not address the issue of insurance taxes and levies that cause non-insurance and underinsurance.

“The combined impact of the GST, NSW insurance stamp duties and the ESL result in households typically paying more than 50% tax on their policies, with small businesses typically paying more than 70%.”

The inquiry examined the causes, preparation and response to the devastating 2019/20 bushfires. The report’s executive summary says the fires were “some of the worst in the world and in recorded history”.

“The inquiry was not asked to and did not examine bushfire recovery issues,” the summary says.

It adds that climate change “clearly played a role” and that “we should expect fire seasons like 2019/20, or potentially worse, to happen again”.

“The NSW Inquiry thinks that it is inevitable that there will be future property losses, given the settlement patterns in NSW and legacy development issues,” the report says.

Recommendations include establishing a national bushfire database and setting up NSW as a world centre of bushfire research.