The move is expected to save strata owners up to 15% on their insurance bill.
In a landmark decision, Premier Chris Minns has unveiled a significant overhaul in the funding structure for emergency services. This transformative decision involves removing the Emergency Services Levy (ESL) from home insurance premiums, ushering in a wave of positive changes for strata owners and residents across the state.
What is the Emergency Services Levy (ESL)?
The ESL is a regular contribution towards emergency service departments in NSW, included in annual strata insurance payments. Under the current system, the ESL results in approximately 18% higher insurance costs and has been a persistent source of discontent for strata owners.
What This Means for Strata
This groundbreaking move holds the following benefits for strata owners and residents in NSW:
- Financial Relief – Strata owners will see a reduction in their insurance premiums. This relief provides more disposable income for strata schemes, allowing for better financial planning (e.g., Administrative and Capital Works Funds), budgeting (maintaining and repairing common property), and resource allocation.
- Cost Savings – According to the Insurance Council of Australia, insurers are expected to pass on the savings to strata owners, reducing insurance costs by up to 15%. This cost-saving measure contributes to more affordable strata living, particularly for owners who have struggled to make regular payments towards the ESL.
Read our – SCA (NSW) – article from back in April calling for the removal of the ESL.
Moving Forward
As the proposed reform enters its early phases, NSW Treasurer Daniel Mookhey is set to initiate consultations with stakeholders and industry experts to advance the necessary changes to the ESL. For strata owners and residents, removing the ESL is a highly anticipated change that signifies the dawn of a new era. Beyond reduced insurance premiums, the move promises fairer funding models, paving the way for a more equitable and thriving strata community.