Raising the BARR – Week ending 10 March 2017

Raising the Barr

A New Fee Added to Council Rates To Be Used To Fund Emergency Services

Last week in Parliament the Government sought to change the way that we fund Emergency Services in NSW. In this conversation, the Emergency Services are limited to 3 services: Fire and Rescue NSW (FRNSW), Rural Fire Services (RFS) and State Emergency Services (SES). Under the new model, that the Government want to introduce, the responsibility will be shifted from insurance policies, across to Council rates. I will explain.

Currently, for households and businesses that take out insurance, a levy is added to fund these 3 emergency services. For an average household, it will mean approx. $150 p.a. added on to their insurance policy. An average business will pay approx. $300 p.a. Also, for car owners with an insurance policy, a small charge of less than 1% is also charged against your policy to fund these same 3 emergency services.

It is a fact that about 95% of households have building insurance and about 64% of households have contents insurance. The Government have called those that don’t have insurance “shirkers”. However, it is my experience that insurance is a very difficult decision for people who by and large want to have insurance but sometimes, just cannot afford it. And yes, we sometimes hear stories about people that experience fire or flood and lose everything – and they had no insurance. These are always sad stories to hear and process.

So, the Government have proposed to catch up with the “shirkers” by changing from the insurance policy charge model, across to the new model which will be a charge on the Council rates. Under the Council rates model, no household will be able to opt in or opt out. Councils will be left to do the work of the State Government and collect the fee, and undoubtedly the abuse and anger of residents that will see a sudden rise in their rates. The net result will be that insurance policies are expected to fall by $47 and Council rates are expected to rise by $185. Seems like a good deal for the insurance companies and big business, but a bad deal for those on the breadline.