Fire and Emergency Services Levy Bill 2017
(Contribution to Debate, 28 March 2017, Legislative Assembly, NSW Parliament)
The Fire and Emergency Services Levy Bill changes the way the state collects fees to fund fire and emergency services: instead of being charged through insurance premiums, a new Fire and Emergency Services Levy will be added to council rates.
I understand New South Wales is the only mainland state that still funds emergency services through insurance and that the proposed system was a recommendation in both the 2009 Australia’s future tax system review by Ken Henry and the Victorian Bushfires Royal Commission and I will not oppose the bill.
Notwithstanding, I have concerns that this bill represents another form of cost shifting onto councils. Councils need to establish new software to capture the required data and change their notices and they will likely get an influx of queries and complaints when rate notices are sent out at the start of the next financial year.
My office has already received calls from ratepayers who know about the changes and thought that the recent inclusion of the levy on their insurance bill represented a double dip. But most people don’t know about the changes and will receive a shock when their rate notice with the levy arrives.
Landholders like pensioners and benevolent societies who are currently exempt from paying rates will receive their first rate notice and many will be confused. Business ratepayers may be confused about charges which will be based on a different set of land classifications than existing business rate categories.
Little information has been provided to landowners so far and many councils expect that there will be widespread misunderstandings that they will have to deal with. The government’s promised flyer and hotline will help however this must be in addition to other measures to inform the community well in advance. The government must come good on its promise to reimburse councils for ALL costs associated with this change and I understand the government has been working with Local Government NSW on this.
I am concerned that there is no guarantee that new costs for the Fire and Emergency Services levy will be offset by savings in insurance as calculations will be different. The levy will no longer be based on a percentage of insurance premiums but instead comprise of a combination of a fixed component and an ad valorem component based on the unimproved capital value of the land.
I am concerned that this could mean ratepayers with higher unimproved land values will contribute a much greater proportion of the fund that won’t be compensated for through savings on insurance premiums. This is especially a problem for people who are asset rich and income poor, which is common in the inner city where land values have rocketed over the last two decades. I welcome the government’s pensioner concession and hardship scheme and hope they will go far enough to prevent disadvantage.
The government will need to closely monitor how this new way to collect the levy for fire and emergency services operates and make changes should problems arise.