Clarence Valley’s ratepayers, along with all others across NSW, will have an extra charge on their rates and charges bill when it falls into their letterboxes in July 2017.
The NSW Government will implement its decision, announced in December 2015, to replace the insurance-based Emergency Services Levy (ESL) with a “fairer” Emergency Services Property Levy (ESPL).
When announcing the release of the Emergency Services Levy Insurance Monitor Report in August, New South Wales Treasurer Gladys Berejiklian said the work of the report’s authors, Professor Allan Fels and Professor David Cousins AM, who are monitoring changes in how the levy is collected, would “ensure that insurers pass on the benefits of abolishing the ESL to households and businesses through lower insurance premiums”.
“The vast majority of insured residential property owners are expected to be better off under the ESPL, with the average insured property owner saving about $40 a year,” she said.
“The ESPL will be budget neutral and will not raise any extra revenue for the government.
“The fairer system will mean all property owners will contribute to fire and emergency services – putting downward pressure on insurance premiums and helping to reduce NSW’s high rates of underinsurance.”
Prof Fels said: “Our job is to protect consumers and ensure that insurers pass on savings.
“Penalties up to $10 million can apply to corporations and $500,000 for individuals if insurance price exploitation is found.”
Insurance Council of Australia (ICA) acting CEO Karl Sullivan (in July this year) said the soon to be replaced ESL “adds on average 21 per cent to home and contents insurance premiums”.
Ms Berejiklian has estimated that the extra charge on rates notices will average $160.
According to a report received and noted unanimously at the October Clarence Valley Council meeting, the ESPL will be levied in much the same way as council rates; comprised of: “A fixed component – a single amount per property, regardless of land value; and, An ad valorem component – a variable amount per property, calculated by multiplying the ad valorem rate by the unimproved land value.
“Land values will be the same land values as are used for local government rates i.e. unimproved land values as determined by the Valuer General.”
The new scheme will require the employment of “one full time Revenue Officer for the remainder of the 2016/17 financial year,” the report to council states.
“…The additional staff resource will be funded from advance payments made by the NSW Government.”
A Memorandum of Understanding between the state and the council “provides Council with funding equal to $55,040 for the start-up costs”, the report states.
“A second advance will be provided in the 2016–2017 financial year, after further details of the ESPL has [sic] been announced.”
The Victorian Government, which switched from a system of funding its fire services through a levy on insurance to a property-based tax from July 1, 2013, also appointed Prof Fels as its fire services levy monitor.
His final quarterly report concluded he was confident “that savings attributable to elimination of FSL have been passed onto consumers”, a July 2016 Insurance Council of Australia fact sheet states.