NSW will move to a property-based emergency services funding regime on July 1 after Parliament passed the Fire and Emergency Services Levy Bill last week.

The Insurance Council of Australia (ICA) has welcomed the move, which axes the emergency services levy (ESL) on residential and commercial property insurance.

“No longer will the responsibility for funding these vital services be borne only by households that purchase insurance, but by the entire community,” CEO Rob Whelan said.

“Everyone benefits from these services, and it is only fair that all homeowners contribute to their upkeep.”

State Treasurer Dominic Perrottet says abolishing the ESL will cut the cost of insurance in NSW by $938 million next financial year, and help address underinsurance.

The ESL raises household premiums by 20% and commercial premiums by 30%.

“Our reform is a change for the better,” Mr Perrottet said. “As well as making insurance more affordable, this reform provides a fairer way of funding our fire and emergency services.

“This system will also bring NSW into line with all other mainland states, which have already moved away from an insurance-based levy to a land-based levy.”