Tasmania is scrapping a levy on business insurance policies as part of an emergency services funding overhaul of arrangements described as “complex, unfair and unsustainable”. 

The Tasmania Fire Service (TFS) and the State Emergency Service (SES) will unite under the reforms and a mix of funding streams no longer considered fit for purpose will be changed. 

The Government last week released a draft Tasmania Fire and Emergency Services Bill, developed following more than six years of reviews and public consultation. 

Existing funding arrangements are based on a complicated and narrow model introduced in 1979 that no longer reflects changes such as greater mobility, technology advances, longer fire seasons, increased response duration, and the impact of climate change.  

“We know from the reviews that the current funding arrangements for the TFS and SES are complex, unfair and unsustainable,” Police, Fire and Emergency Management Minister Felix Ellis said. 

“Our Government will abolish the business insurance levy, reform the property-based levy and continue the motor vehicle levy.” 

The Insurance Council of Australia (ICA) says Tasmania’s decision to ditch the insurance levy is a step forward, will improve cover affordability and encourage more businesses to insure their assets. 

“The responsibility for funding these vital services will now be shared by the entire community, not through an impost on businesses who purchase insurance,” Acting CEO Kylie Macfarlane said. 

The decision leaves NSW as the only state using a tax levied on insurance customers to fund emergency services. ICA estimates the NSW Emergency Services Levy (ESL) adds about 18% to home premiums and 40% to business cover. 

“It is now incumbent upon the NSW Government to follow the lead of the Tasmanian Government and reform the ESL to find a fairer way to fund emergency services in that state,” Ms Macfarlane said. 

Submissions on the draft bill and the funding options are open until November 5. Two options have been released for changing the property-based levy while the motor vehicle levy will continue in its current form but with an extension to include motorcycles. More information is available here.