March 29, 2017
Berejikian’s new billion dollar tax
The Berejiklian Government claims its new Fire and Emergency Services Levy (FESL) is not new, just fairer.
Neither is true.
The FESL is not merely tinkering at the edges. It is a new billion dollar tax on property owners and will cost many NSW households hundreds of dollars more each year.
At present around three quarters of the funding for our two fire services and the SES comes from a levy on insurance companies. Most (but not all) of those insurers pass on the cost of this levy to their policy holders.
NSW Treasurer Dominic Perrottet says this levy is currently costing the average fully-insured household $233 per year, which will no longer be paid under his new FESL.
So insurance will become cheaper. The Treasurer also claims that the average fully-insured residential property owner will save $47 per year (the remaining $186 being the cost of the new FESL).
The problem is that the Government’s FESL will be based on unimproved land values set by the Valuer-General and the $47 saving is based, by our reckoning, on an unimproved residential land value of about $330,000.
To put that into context, the Valuer-General’s average unimproved residential land value across NSW is $572,000, and in Sydney it is $902,000.
The FBEU has estimated that the FESL on $572,000 will cost about $249 per year, and the FESL on $902,000 about $335. If we are even close to correct then the Treasurer’s $47 saving has suddenly blown out to an extra $100 cost for thousands of households. Ironically, it is the residents in the Liberals’ own north shore, northern beaches and eastern suburbs heartlands that will be hit the hardest of all.
The bottom line is that if you own a residential property without contents insurance then you will probably pay more and if your unimproved residential land value is over $500,000 – or if you live in Sydney – then you will almost certainly pay more.
The Treasurer has promised that “from May 1, property owners will be able find out how much they will pay”. Great, but the Berijiklian Government already pushed the Bill through the lower house of Parliament last night.
Our figures are the result of an attempt to understand and model the impact of the Government’s Bill before it is too late. We are confident they are correct, and we’ll all know just how accurate they are come May, but the public should not have to rely on the FBEU for the truth about this new billion dollar tax.
The Government and Treasury were given our calculations yesterday for comment. A spokesman for the Treasurer is quoted in today’s Sydney Morning Herald as saying that the FBEU’s figures “do not appear to accurately reflect the amount of FESL that property owners will pay”, but released no figures of their own. Why?
The Berejiklian Government should release the actual cost of the FESL to property owners now, before the FESL becomes law.
For a printable version of this SITREP please click here.