Tuesday, 21 November 2023

The Insurance Council of Australia (ICA) today said the insurance sector’s participation in a $30 million co-funding agreement with other financial services sectors would address under-met demand for financial counsellors. 

The three-year Industry Funding Model for Financial Counsellors will see an estimated 9,000 additional Australians access face-to-face financial counselling and enable the National Debt Helpline to handle an extra 17,000 calls a year. 

The funding model is in response to recommendations made by Louise Sylvan AM in her review of financial counselling in 2019, following the Hayne Royal Commission in 2017.  

The recommendation for greater industry support of financial counselling was made in response to long waiting lists for financial counselling which meant that some Australians who wanted the service were being turned away. 

The independent body tasked with decisions regarding funding allocations and prioritisation will be funded by the Australian Government and coordinated through Financial Counselling Australia and will be established in early 2024. 

Comment attributable to Andrew Hall, CEO Insurance Council of Australia:  

The insurance industry is committed to supporting financial counselling, and has been actively involved in discussions with other financial services and the Government on the development of an industry co-funding model since 2020. 

Financial counsellors play a vital role in supporting people who are experiencing financial hardship, and a sustainable funding model helps to ensure they can continue to provide their important service. 

Thursday, 16 November 2023

The Insurance Council of Australia (ICA) has congratulated the New South Wales Government for its decision to reform the Emergency Services Levy (ESL), announced by Premier Chris Minns today.

The ESL currently adds up to 18 per cent to home insurance premiums and around 30 per cent to commercial premiums to fund emergency services.
The tax penalises those who pay insurance amid a cost-of-living crunch and at a time when worsening extreme weather means cover is needed more than ever.

Abolition of the ESL on insurance will see the cost of home cover up to 15 per cent lower on average, while for business cover the figure will be around 23 per cent lower.

New South Wales insurance customers pay around three times the amount of state taxes than Victorian insurance customers.

All other mainland states have removed similar levies, and Tasmania has announced a process to reform its levy which is applied to commercial insurance only.

The ICA has campaigned for more than a decade for the removal of the tax, and in the lead-up to the March State election ran a communications campaign to “Find a Fairer Way” to fund emergency services.

Research conducted at that time showed that almost two-thirds of New South Wales voters (65 per cent) support removing the ESL and replacing it with an alternative funding model for emergency services.

The ICA was disappointed that the previous Government’s attempts to reform the tax in 2017 failed, which has meant that since then insurance customers have paid $5.6 billion in ESL on top of their premiums.

State Budget Papers estimate that insurance customers will pay $1.3 billion through the ESL this year and, without reform, would pay more than $5.1 billion over the forward estimates.

Quote attributable to ICA CEO Andrew Hall:

Today’s announcement to reform the ESL and find a fairer and more equitable way to fund emergency services is great news for anyone who takes out insurance in Australia’s largest state.

It clearly demonstrates the Minns Government understands the impact of this tax on the State’s capacity to recover from extreme weather events, like last year’s record-breaking floods.

Reforming the ESL will be a major win for insurance affordability in New South Wales, an issue that is being discussed around kitchen tables and in small businesses around the State.

The ESL is a poorly designed and inefficient tax that numerous previous inquiries have said should be abolished and we congratulate Premier Minns, Treasurer Mookhey, and Emergency Services Minister Dib for their announcement today.