Councils warn emergency services levy hike could trigger service cuts
“Councils will be able to pay the emergency services levy in quarterly instalments which will lessen the impact of the increase,” the government agency said in a notice to mayors and council managers.
“The first quarterly instalment is not due until September 30 which provides more time for councils to review their budgets.”
The notice said the reforms reflected existing arrangements in other states.
“This will result in an increase in the cost of providing emergency services across the state, which will be shared, as per the usual funding arrangements between insurance providers, the state government and local councils.”
In 2017, Premier Gladys Berejiklian shelved plans for a new system to fund fire and emergency services in response to backlash over sharp increases in what some property owners would pay.
Local Government NSW president Linda Scott, who is the City of Sydney’s deputy mayor, said that councils were told of the need for the new contribution through a Revenue NSW invoice on Tuesday.
“Councils strongly support moves to ensure fair workers’ compensation, but as a result of government decisions about implementing these laws councils and communities have now been hit with significant new costs without consultation or warning.”
The organisation estimated the increase would cost councils a combined $14 million a year.
“Councils are already in the process of setting their budgets for the coming year after community consultation, so this new unexpected cost will likely mean a reduction in service to local communities.”
The state’s local councils will contribute the smallest share to the cost of the levy, with insurers contributing 73.7 per cent and the government pitching in 14.6 per cent.
Insurance Council of Australia spokesman Campbell Fuller said the “unfortunate” changes, flagged in the NSW budget, would mean a jump in the final amount of insurance policy holders would pay.
“We calculate the new emergency services contribution target will result in a 15.2 per cent increase in the emergency services levy component of insurance policies from July,” he said.
Mr Fuller said the council had estimated the price hike would mean that 2000 homeowners would stop insuring their properties and 9000 customers would stop paying for contents insurance.
“It will hurt consumer and small business finances and it will be detrimental to the levels of non-insured and under-insured in the community,” he said.
He said the workers’ compensation changes should be funded through consolidated revenue.
Police and Emergency Services Minister David Elliott said the levy increase would ensure that firefighters who had served the community received the medical care and support they needed.
“Firefighters put their lives on the line to keep us safe and these changes ensure they receive the support they require in their hour of need,” he said.
Megan Gorrey is the Urban Affairs reporter at the Sydney Morning Herald.