The recent decision by the New South Wales state Government to reinstate the emergency services levy (ESL) continues to cause client concerns.
Since the decision last week,
NIBA has met with the New South Wales state treasurer Dominic Perrottet, who confirmed the decision to continue with the ESL on insurance policies and said the Government plans to introduce legislation later this month to reinstate the levy.
Sarah Lyons, managing director of Australian broking at Arthur J
Gallagher, said that the Government’s decision, just four weeks away from when the proposed changes were due to take place, is causing concern for clients.
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“The Government’s backflip on the ESL has created a number of concerns, most importantly the material impact on our clients,” Lyons told Insurance Business. “In the interim, while discussions continue to establish a firmer position, we are keeping clients informed on events as they unfold and will ensure they remain our first priority.”
Brokers should tell clients to expect a continuation of the current ESL arrangements until the Government makes specifics known in the near future.
The industry reacted with shock and disappointment to the news that the Government had decided against reducing taxes on insurance.
With ESL, stamp duties and GST, more than 30% of household insurance premiums and 40% of commercial insurance property premiums go straight to the Government.
Drew Ferns, AJG’s Wollongong branch manager, said that the U-turn from the Government has sent a mixed message to the industry.
“Removing the ESL component was seen to be a big step in the right direction, so this announcement sends mixed messages to the entire community,” he said.
Related stories:
NSW premier speaks out on ESL outrage
Industry ‘shocked and disappointed’ by Government ESL delay
