Suncorp’s consumer insurance arm, which includes major brands AAMI and GIO, argues the NSW government’s approach effectively hides a significant tax burden in policy costs. In NSW, almost $500 of a $1000 premium can be absorbed by taxes and charges, even before factoring in rising base risk costs. A key component is the emergency services levy, set at about 18% of premiums, which is now under formal review by the Minns government. The review focuses on whether it is fair that only insured households shoulder so much of the bill for funding essential emergency services.
Industry executives say the structure means policyholders are hit by multiple layers of charges on top of the underlying risk premium. Customers pay the core insurance price, then see it inflated further by GST, state stamp duty and the emergency services levy, all bundled into the final figure on their renewal notice.
In practical terms, someone paying a $1000 premium can see roughly another $400 tacked on through these taxes and levies, according to Suncorp’s breakdown. That extra cost lands just as inflation drives up construction, repair and reinsurance expenses, compounding affordability pressure on households.
The levy debate is unfolding as states rethink how to fund emergency services amid rising climate risk and insurance costs. NSW’s model effectively concentrates the burden on those who buy insurance, which discourages some residents from taking out or maintaining cover.
Policy experts suggest shifting more of the funding to broad-based revenue such as property or land taxes to spread the load more evenly. For now, the Minns government’s review keeps pressure on the state to explain why essential services are bankrolled so heavily through people’s insurance bills.
