Client Alert - NSW Government defers implementation of FESL
Marsh has previously advised that, from 1 July 2017, a new levy would be introduced on property owners via council rates to fund fire and emergency services in NSW. Known as the Fire and Emergency Service Levy (FESL), this new funding model would replace the existing levy collected on NSW property insurance policies.
On 30 May 2017, the NSW Government announced that it will defer the introduction of the FESL. The deferral is to ensure small to medium businesses do not face an unreasonable burden in their contribution to the state’s fire and emergency services. It was noted that while the majority of fully insured policyholders would be better off under the new system, some businesses were facing unintended consequences.
The NSW Premier, Gladys Berejiklian, said during the announcement “While the new system produces fairer outcomes in the majority of cases, some people – particularly in the commercial and industrial sectors – are worse off by too much under the current model, and that is not what we intended.”
The NSW Government has stated its intention to work with local government, fire and emergency services, the insurance industry and other stakeholders to review the policy. During this time, the levy will continue to be collected via insurance premiums.
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