Reforms to the NSW emergency services levy on insurance are likely to return, according to a new report.

The industry has lobbied for years to have the controversial levy removed, saying it is unfair and contributes to underinsurance.

It was due to be replaced by a property-based levy in July last year, but just one month before the change the NSW Government pulled out, leaving insurers furious. The old levy had to be reinstated, costing the industry about $40 million.

Now a report from the State Parliament’s Legal Affairs Committee says if the Government is re-elected, the reforms will likely return. But it is highly critical of last-year’s debacle and makes a series of recommendations aimed at avoiding a repeat performance.

The Insurance Council of Australia says it is vital that the reform progresses, despite last year’s “setback”.

“This is a regressive and unfair tax on households and small businesses that do the right thing by insuring their assets,” spokesman Campbell Fuller said.

“The setback in NSW should not see the levy remain indefinitely.”

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