The Insurance Council of Australia (ICA) has welcomed the significant funding for resilience in the New South Wales government's 2024-25 Budget as a positive step for communities that should support efforts to improve insurance affordability.
The Budget, presented on 18 June, provides for an A$5.7bn ($3.8bn) four-year recovery and resilience package including A$525m towards the Resilient Homes Fund to be rolled out across the Northern Rivers and Central West regions, which will help reduce the risk of flood damage to homes and help protect lives in some of the most at-risk areas of the country.
The Resilient Lands Programme is allocated A$87.4m to address flood recovery and future planning in the Northern Rivers region and unlock new land for development and relocating homeowners in high-risk flood zones.
The ICA said in a statement, “The commitment to further investment in resilience and mitigation measures to protect communities against extreme weather comes as updated insurance data shows that catastrophic extreme weather events in New South Wales over the past two years has caused around A$4bn in insured losses.”
The ICA also welcomed the government’s recommitment to remove the Emergency Services Levy (ESL) – an unfair burden on insurance customers amidst a cost-of-living crisis.
New South Wales has the highest rate of insurance taxes in the country with insurance customers hit with both Stamp Duty and the ESL, which means they pay 20-40% for insurance than any other state or territory.
The Budget papers show that without reform, the government would collect more than A$12bn from insurance customers over the forward estimates – around A$5bn through the ESL and A$7.1bn through stamp duty.
The reforms will bring insurance tax arrangements into line with every other mainland state or territory.
ICA CEO Mr Andrew Hall said that the Budget announcements are important investments in the future of New South Wales communities and should improve insurance outcomes in the state.
“By prioritising resilience initiatives, the government is taking a proactive approach to safeguarding lives and property from the increasing threat of extreme weather events.
“The government’s recommitment to removing the ESL is welcome and will ease the burden on New South Wales insurance customers.
“For years the ESL has unfairly penalised insurance customers in the state, who because of flood risk already pay some of the highest insurance premiums in the country.”