Paying for Emergency Services !

When you find that your house is on fire you expect the fire brigade to arrive under lights and siren and extinguish the flames.   When a storm blows tiles off your roof you expect the emergency services people to place tarpaulins to keep the rain out.  If your child gets lost on a hike you expect emergency service volunteers to find and bring him or her to safety.    Until now, these essential emergency services were very unfairly funded in New South Wales.

Funding consisted of a tax applied to every insurance policy taken out by owners for the cover provided by inasurance to protect their property - and that was added to the premium insurance companies charged.  Not every house was insured, and so the cost was spread very unevenly.   The uninsured received the benefit from emergency services but were blatant free loaders when it came to sharing the cost.

All that is about to change from July 1.   The $950 million cost of Fire and Emergency services in this state will be an added charge to rate notices.  It will be distributed across all dwellings in this state, whether they are insured or not and previously exempt sections will now pay their fair share. Consequently, the cost of home insurance should see a sharp fall in premium costs.

For the first time, churches and what is called " public benefit land "  such as scout halls will contribute a fixed charge of one hundred dollars a year and farm land and commercial property will be levied a fixed $ 200 plus an amount calculated on the unimproved value yet to be determined by the valuer general.

Emergency services are a universal necessity which is free to all.   The fire brigade does not enquire if you are insured before trying to put out a house fire and the task of spreading the cost across all property owners is long overdue.  The cost of house insurance has been steadily rising and the pool contributing to funding our emergency services has been diminishing.  Transferring this cost to council rates spreads the load evenly with no increase in collection costs.

The valuer generals office estimates that the cost to each rate notice will be about $185 a year and that will be determined by each years emergency services budget, but it is important that the government ensure that Insurance companies pass on the cost of lifting that heavy tax load imposed on insurance premiums.   There is the expectation that cheaper prices will see an increase in the stock of suburban homes covered by fire and storm insurance.

Insurance is a competitive industry provided by a huge number of individual companies.  Removal of the emergency services impost means that householders can seek a price benefit by comparing insurance prices across a wide price spectrum.   From July 1 the charge to protect property against fire and storm damage should be much more affordable !