A coalition of business, consumer, community and industry organisations has called on every party in the New South Wales Parliament to commit to scrapping the insurance tax before the March 2027 state election. The joint push targets the Emergency Services Levy, a charge embedded in home and business insurance premiums that campaigners say is pushing cover out of reach for households already squeezed by a cost-of-living crisis. For insurers, brokers and reinsurers with exposure to Australia’s largest state, the alignment of six separate industry, business and consumer bodies behind one demand marks an unusually broad consensus on tax reform, and puts insurance affordability squarely on the agenda for the next state election cycle. The demand lands as NSW insurers continue to reprice property risk in the wake of repeated catastrophe declarations, adding political weight to a debate that has run for years without resolution.
What the levy adds to a Sydney home premium
The Emergency Services Levy is not a line item most policyholders notice until they read the fine print, yet its effect on the final bill is substantial. The levy currently adds around 18 per cent to the cost of home insurance and around 34 per cent to business insurance in New South Wales. That gap between residential and commercial loading matters for insurers pricing commercial lines, where the levy compounds an already hardening cost base and can tip marginal accounts toward non-renewal. The levy has risen 54 per cent over the past six years, a trajectory campaigners say is compounding the pressure that extreme weather and inflation are already placing on insurance costs. For carriers, a levy that rises faster than the underlying risk it funds becomes an increasingly hard number to defend to policyholders at renewal, a dynamic insurers elsewhere in the region are also weighing as they assess how extreme heat could erode economic output by the end of the decade.
Six bodies, one message to every NSW party
The Insurance Council of Australia formally launched its “Why are we waiting?” campaign on 4 August 2026, calling on the New South Wales Parliament to scrap the insurance tax and fund emergency services more fairly, via the site scraptheinsurancetax.com.au. It arrives with the backing of five other organisations spanning consumer advocacy, strata management, social services and insurance broking, underscoring that objections to the levy no longer sit solely with the industry that collects it. Andrew Hall, CEO of the Insurance Council of Australia, said business, consumer, community and industry groups have concluded that the levy is unfair and must be abolished. Framing the levy as a tax rather than a premium loading is deliberate: it positions the charge as a policy failure for the state government to correct, not a pricing decision insurers can absorb on their own. The timing is pointed: with the state election still some eighteen months away, the coalition is seeking commitments now, before party platforms are locked in, rather than campaigning against a policy already fixed in an election manifesto.
The economic case for a broad-based property charge
Behind the campaign sits modelling the Insurance Council commissioned to quantify what abolition would actually deliver. Independent economic analysis commissioned by the Insurance Council found that replacing the levy with a broad-based property charge would leave 2.1 million New South Wales households better off and deliver annual savings of up to A$460 million. The same analysis translates directly into take-up: the change is expected to lead an additional 82,000 households to take out building insurance and 320,000 households to take out contents insurance, a meaningful dent in the underinsurance gap that has worried regulators and reinsurers alike, and one that echoes findings elsewhere that business owners fear gaps in their own coverage even when a policy is nominally in place. The affordability argument is reinforced by actuarial research estimating that more than 1.6 million homes face insurance affordability pressure, while 12 natural disasters have been declared in Sydney over the past five years, a frequency campaigners argue makes continuous access to cover, not just the theoretical availability of a policy, the real test of what the levy costs the state. For insurers, a shift away from a premium-based levy toward a broad-based property charge would also remove a structural disincentive to writing new business in the state, since every additional policy currently carries the levy rather than diluting it across a wider base. The disaster count also sits alongside a broader regional conversation about who pays for resilience, echoing the debate over New Zealand’s push to work out who funds climate adaptation. That distinction — a tax that scales with what a household chooses to insure, versus a broad-based charge that would not — is the crux of why insurers, brokers and consumer groups alike are treating the levy as a design flaw rather than a fair contribution to emergency services funding.
Consumer advocates and brokers make a united case
The campaign’s breadth is its most notable feature: consumer, strata and broking bodies are making functionally the same argument from different vantage points. Cara Varian, CEO of the NSW Council of Social Service, said that for too many people the levy has turned insurance into a luxury they cannot afford, while Eamon Waterford, CEO of the Committee for Sydney, warned that amid a cost-of-living crisis, communities across Sydney should not be forced to decide they cannot afford home insurance. Robert Anderson, President of Strata Community Association NSW, said SCA (NSW) has long advocated for a fairer funding model that removes taxes on insurance and improves affordability for strata communities, a constituency particularly exposed given how levies scale with the sums insured on shared buildings. Julia Davis, Principal of External Relations and Advocacy at the Financial Rights Legal Centre, said home insurance premiums are rising sharply across Australia, leaving more households without the coverage they need, a trend that sits awkwardly alongside the broader direction of global commercial insurance pricing, which has not been mirrored in Australian property lines. From the distribution side, Richard Klipin, CEO of the National Insurance Brokers Association, said insurance brokers see the impact of the levy on their clients every day, adding a frontline perspective to the modelling. For insurers weighing how affordability pressure could reshape demand in adjacent markets, including how ageing populations are already reshaping risk pools in Australia’s private health cover, the NSW campaign signals that tax design, not just underwriting discipline, is now central to the access-to-insurance debate.
Full details of the campaign, including its economic modelling, are available from the Insurance Council of Australia.
