ICA welcomes NSW budget, aims for insurance affordability

NatCat events in the past two years caused $2.64b (AU$4b).

The Insurance Council of Australia (ICA) has welcomed the New South Wales Government’s 2024-25 Budget, which includes significant funding for resilience to support insurance affordability and community protection. 

The budget features a $3.76b (AU$5.7b) four-year recovery and resilience package, including $346.5m (AU$525m) for the Resilient Homes Fund targeting flood damage reduction in the Northern Rivers and Central West regions. 

Additionally, $57.68m (AU$87.4m) is allocated to the Resilient Lands Program for flood recovery and future planning in the Northern Rivers, facilitating new land development and relocation of homeowners in high-risk flood zones. 

This funding is crucial as recent insurance data indicates that catastrophic weather events in NSW over the past two years have caused approximately $2.64b (AU$4b) in insured losses. 

The ICA also praised the Government’s recommitment to removing the Emergency Services Levy (ESL), which, along with Stamp Duty, currently makes NSW residents pay 20% to 40% more for insurance than other states. 

Without reform, the Government would collect over $7.92b (AU$12b) from insurance customers over the next few years, including $3.30b (AU$5b) from the ESL and $4.69b (AU$7.1b) from stamp duty. 

The ongoing ESL reforms aim to reduce this financial burden and align NSW's insurance tax arrangements with other mainland states. 

“For years the ESL has unfairly penalised insurance customers in the State, who because of flood risk already pay some of the highest insurance premiums in the country.” Insurance Council of Australia CEO Andrew Hall said in a statement.

($1.00 = AU$1.51)