Is it any wonder the public has lost faith in politicians? NSW ESL what a mess!

Posted: May 31, 2017/Under: Industry ImageInsurance Taxes/By: Allan Manning
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No news article has caused my phone or email to run to hot as the one announcing the New South Wales back flip on the removal of the State’s Emergency Services Levy earlier this week.

Let us review the facts. The New South Wales government are the last mainland state in Australia to remove the levy. They did not have to reinvent the wheel, all they had to do is copy one of the other states that have gone through the change with little or no drama and pick the one that worked best.

They chose Victoria to model their change on, which to my thinking was the most unfair for the public, but created the greatest windfall for government and made it the most difficult for the insurance industry. (But this was all masked by beating up on the insurance industry).

The NSW government also engaged, with huge fan fare, high profile chest beating Allan Fels  to oversee it all.

Now a few people complain and with just one month to go it all gets put on hold. Like all the people who wrote or phoned me, I cannot believe this has occurred.

The irony here is that, within the industry, every one of us should be, with only one month to go, applauding the NSW Government for removing the disincentive for full insurance and grossly unfair hidden tax. Instead we are shaking our heads in complete disbelief!

I did hear one case as to how the changes are supposedly unfair. The Insured is a printer from memory and paying about $700 in premium for his business. (This is an extremely cheap premium but that too is another story as I question the level of coverage). With the removal of the Emergency Services Levy he/she is saving somewhere between $200 and $300 in their overall insurance and Emergency Services Tax spend.

But it comes out the same person also owns the entire complex and is now being asked to pay $3,500 with their rates for the entire complex due to the transfer of the Emergency Services Levy to property rates.

Either the building was not insured before or the tenants were paying the cost of insurance including the Emergency Services Levy as an outgoing. In that case, the tenants will (until this back-flip) now save the Emergency Services Levy as the cost of the building insurance would by definition go down.

Now the rates go up, but rates are also an outgoing just as the cost of building insurance is. So the extra cost on the rates just gets allocated to the tenants and should in most cases be less than before.

In a domestic rental situation, the landlord would be wearing the Emergency Services Levy as a cost of insurance which he or she includes in their rental charge, the same as the rates. The insurance goes down, the rates go up. If they were fully insured it should be less, if not, they are now paying their fair share for the emergency services.

Maybe I am missing something but for people who, in the vast majority of cases, were fully insured, I cannot see how their cost goes up, whether it be small to medium business or anyone else.

All this delay is going to do is have people question the ability of public servants, the over paid consultants and politicians and allow those who currently are not paying their way, but benefiting from the Emergency Services, to continue to do so.

If no one else does, every single person in the insurance industry needs to have a good hard look at their local member in NSW.

It must be remembered that the current Premier of NSW was the previous treasurer who took years to put all this together and yet was late passing the legislation and despite preparing white papers, reviewing this from every angle, now changes it due to what I suspect is just a few misinformed complainers.

I keep asking myself over and over again, how can this situation have occurred? Perhaps just a bit of consultation would do the world of good here. It is not too late! Any of us would be pleased to help out at no cost!

In the meantime, perhaps the New South Wales government and Fels could stop bashing up the insurance industry and painting us, the unpaid tax collectors of the past who did not want the thankless task in the first place, and using the necessary change to beat up insurance to hide the changes and as it turns out their own abysmal performance.

I understand more and more each day that we are being let down by our governments with the constant changes to superannuation, the knee jerk punitive changes to the 457 visas  and this debacle over Emergency Services Levy and can understand why the likes of Brexit, Trump and Macron happen.

All we want as a society is honest, fair and sensible government. The New South Wales government has, in the eyes of many of us, failed on all three!

Just one last thing NSW Government and Prof Fels. STOP telling people to buy insurance on price alone. Insurance is about protection NOT price. The quality and breadth of coverage, the level of claims service, and the financial rating of the insurer are far more important criteria than price. As someone who has handled insurance claims for over 45 years, I can count on one hand how many people think of the premium saving they  made at the time of a major loss. In the few cases that have, it has been: “I saved this amount, but tell me Allan how much that has just cost me?”. Not once has it been a positive experience.


The fact that Federal and State Governments do not understand this simple truth shows a complete lack of even the most basic understanding. It would be just as stupid for me to argue that the electorate should be choosing our politicians. public servants and advisers on price! We certainly could not do any worse than we have in NSW.