‘The insurance crisis is not a problem that can wait’: But is anyone listening?
- Replies 2
Rising costs are hitting Australian businesses hard, but for some, the burden has become nearly impossible to bear.
What was once a manageable expense has now ballooned into a financial strain, forcing business owners to make difficult choices just to stay afloat.
At the centre of the issue is a controversial levy that has sparked frustration and debate, with calls for urgent reform growing louder.
Elton Cummings’ business insurance had skyrocketed to an eye-watering $3,000 per month, more than double what he paid three years ago.
Natasha and Brendon Garred were quoted nearly $270 per day to insure their family-owned fruit shop against flood damage.
They were among hundreds of Australians struggling under soaring insurance costs, with many blaming an outdated levy that added thousands to their premiums.
New South Wales remained one of only two states still imposing the Emergency Services Levy (ESL), a charge critics argued was driving businesses and homeowners to drop insurance altogether.
Fifteen months had passed since Premier Chris Minns promised a review of the ESL, which funded the state’s emergency services.
Business leaders warned that further delays would deepen the crisis.
Among those hardest hit were residents of Lismore, where many were still battling financial ruin after the devastating 2022 floods.
Elton Cummings, who owned an electrical goods and furniture store in Lismore’s CBD, had seen his annual insurance bill surge from $14,000 before the floods to a staggering $35,000.
The ESL added up to 18 per cent on residential policies and 30 per cent on business insurance, with the NSW Government projected to collect $1.3 billion from it in 2024/25.
Business NSW, representing 50,000 members, warned that as more businesses and households opted out of insurance, the burden fell on a shrinking pool of policyholders.
‘The ESL is applied to the base premium, followed by GST and then NSW stamp duty,’ Business NSW CEO Daniel Hunter shared.
‘This means that when premiums rise, the two taxes, ESL and stamp duty, add to the cumulative load and the total cost of insurance leaps.’
He warned the levy discouraged people from taking out insurance, skewing the risk pool and making premiums even more expensive.
‘The insurance crisis is not a problem that can wait for long-term solutions,’ he said.
‘While reforms to improve affordability and accessibility are underway, businesses need immediate support.’
’Delays in addressing these issues will only deepen the economic risks to our state.’
The Minns Government insisted it was committed to reform but would not rush the process.
‘The Minns Government has committed to creating a fairer system for funding emergency services while helping to drive down insurance costs,’ a government spokesperson said.
‘This long overdue reform to make our tax system fairer and better adapted to the conditions we face is now well underway. It is important we get it right.’
Lismore businesses, still recovering from the pandemic and the catastrophic 14.4m floodwaters of 2022, said they were drowning in debt without insurance support.
A federal inquiry report released in October 2023 found insurance companies had ‘failed too many people’ in the wake of the floods, which saw 300,000 claims totalling almost $7.4 billion.
Independent MP for Calare Andrew Gee condemned insurers for their handling of claims, calling it ‘disgraceful and disgusting’.
‘Insurance companies treated their own policyholders in a ruthless and appalling way—it must never happen again,’ he said in the report.
‘The evidence taken by this inquiry amounts to a withering and damning indictment of the insurance industry.’
‘While some in the industry may be ashamed of it, I suspect many are not.’
Rising costs are hitting businesses hard, forcing tough decisions—just like those facing the insurance crisis.
With insurance costs soaring and businesses struggling to keep up, do you think the Emergency Services Levy is still a fair way to fund essential services?
Let us know your thoughts in the comments.
What was once a manageable expense has now ballooned into a financial strain, forcing business owners to make difficult choices just to stay afloat.
At the centre of the issue is a controversial levy that has sparked frustration and debate, with calls for urgent reform growing louder.
Elton Cummings’ business insurance had skyrocketed to an eye-watering $3,000 per month, more than double what he paid three years ago.
Natasha and Brendon Garred were quoted nearly $270 per day to insure their family-owned fruit shop against flood damage.
They were among hundreds of Australians struggling under soaring insurance costs, with many blaming an outdated levy that added thousands to their premiums.
New South Wales remained one of only two states still imposing the Emergency Services Levy (ESL), a charge critics argued was driving businesses and homeowners to drop insurance altogether.
Fifteen months had passed since Premier Chris Minns promised a review of the ESL, which funded the state’s emergency services.
Business leaders warned that further delays would deepen the crisis.
Among those hardest hit were residents of Lismore, where many were still battling financial ruin after the devastating 2022 floods.
Elton Cummings, who owned an electrical goods and furniture store in Lismore’s CBD, had seen his annual insurance bill surge from $14,000 before the floods to a staggering $35,000.
The ESL added up to 18 per cent on residential policies and 30 per cent on business insurance, with the NSW Government projected to collect $1.3 billion from it in 2024/25.
Business NSW, representing 50,000 members, warned that as more businesses and households opted out of insurance, the burden fell on a shrinking pool of policyholders.
‘The ESL is applied to the base premium, followed by GST and then NSW stamp duty,’ Business NSW CEO Daniel Hunter shared.
‘This means that when premiums rise, the two taxes, ESL and stamp duty, add to the cumulative load and the total cost of insurance leaps.’
He warned the levy discouraged people from taking out insurance, skewing the risk pool and making premiums even more expensive.
‘The insurance crisis is not a problem that can wait for long-term solutions,’ he said.
‘While reforms to improve affordability and accessibility are underway, businesses need immediate support.’
’Delays in addressing these issues will only deepen the economic risks to our state.’
The Minns Government insisted it was committed to reform but would not rush the process.
‘The Minns Government has committed to creating a fairer system for funding emergency services while helping to drive down insurance costs,’ a government spokesperson said.
‘This long overdue reform to make our tax system fairer and better adapted to the conditions we face is now well underway. It is important we get it right.’
Lismore businesses, still recovering from the pandemic and the catastrophic 14.4m floodwaters of 2022, said they were drowning in debt without insurance support.
A federal inquiry report released in October 2023 found insurance companies had ‘failed too many people’ in the wake of the floods, which saw 300,000 claims totalling almost $7.4 billion.
Independent MP for Calare Andrew Gee condemned insurers for their handling of claims, calling it ‘disgraceful and disgusting’.
‘Insurance companies treated their own policyholders in a ruthless and appalling way—it must never happen again,’ he said in the report.
‘The evidence taken by this inquiry amounts to a withering and damning indictment of the insurance industry.’
‘While some in the industry may be ashamed of it, I suspect many are not.’
Rising costs are hitting businesses hard, forcing tough decisions—just like those facing the insurance crisis.
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With insurance costs soaring and businesses struggling to keep up, do you think the Emergency Services Levy is still a fair way to fund essential services?
Let us know your thoughts in the comments.
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