The NSW Government has stressed the importance of ending the emergency services levy on insurance as it seeks feedback on options for replacement arrangements.

Taxing only those who take out insurance, and thereby allowing the uninsured to avoid paying, is unfair and discourages some people from taking up cover, which further erodes funding, Treasurer Daniel Mookhey and Emergency Services Minister Jihad Dib say in a consultation paper. 

“A system where everyone whose property is protected by emergency services would make a contribution to those services is not only possible, it is in place in every other mainland Australian state,” they say. 

The Government said in November that it intended to overhaul the levy, in a move welcomed by the National Insurance Brokers Association, which has been a vocal advocate for reform.

Alternative options put forward in the consultation paper released yesterday include models based on property capital improved values, unimproved values and gross rental values.

The paper also suggests a fixed charges option that could vary depending on residential, commercial, industrial and farm land use categories, or reflect services costs.

Questions raised include whether revenue from a replacement levy should be collected by local governments or by the state through Revenue NSW. 

The Government, which plans to establish an insurance monitor to make sure benefits from removing the levy on insurance are passed onto consumers, is also seeking feedback on transitional arrangements. 

The levy provides most of the funding for Fire and Rescue NSW, NSW Rural Fire Service and the State Emergency Service. 

The consultation paper is open for feedback until May 22. More details can be found here.