The Actuaries Institute says there is “no clear relationship” between insurance premiums and the cost of providing emergency services in NSW, and funding should instead come from multiple sources.

In its submission to the NSW Government on the state’s emergency services funding structure, the institute says the scheme does not adequately spread the cost among its beneficiaries.

It also says the current set-up lacks transparency. “Under the current insurance levy, there is not a clear link between the main revenue source for emergency services from insurance companies and the expenditure.”

The institute also says there is no visible account of revenue raised from the insurance sector against what is spent on emergency services.

Under the current scheme the bulk of emergency services funding comes from a tax on insurance premiums (73.7%), with the remainder from local governments (11.7%) and the State Government (14.6%).

NSW Treasurer Mike Baird has called this approach “complicated, inefficient and unfair”, saying it leads some people to underinsure and others not to insure at all.

The institute says everyone with access to emergency services should assist in funding so there is “an awareness [among] the public of the total cost of emergency services”.

It suggests property owners, as the main beneficiaries, should contribute a large part of the funds, along with vehicle owners via a $30 increase in motor registration fees “to reflect the considerable proportion of services related to motor vehicle accidents”.

Community organisations and government bodies that use emergency services education programs should also contribute, the institute says.

“Incorporating contributions from local government and general NSW Government, as well as vehicle registrations, would further enhance the equity and transparency of the levy.”

A property levy that acknowledges risk by property type and a limited number of geographical zones would be fairer than the insurance levy, it says.