Mr DAVID SHOEBRID GE ( 11:43 ): On behalf of The Greens, I indicate that we oppose the Government’s Fire and Emergency Services Levy Bill 2017. We oppose it because the Government’s legislation offers a billion-dollar gift to the insurance companies, which will be paid for primarily by ordinary mums and dads and residential owners across New South Wales. Let us be clear that this bill lifts a levy on insurance and transfers that obligation—those hundreds of millions of dollars that are currently obtained through a levy on the insurance industry—squarely to ordinary residential property owners across New South Wales. It a gift to the big insurers, who have been after this for years. They have persuaded other State governments that they should lift the tax on insurance. Insurance companies seem to be much more persuasive in their negotiations with governments than ordinary mums and dads and residential property owners.
The big insurers have persuaded other State governments to lift the levy on insurance. New South Wales was the last bastion. It was the last place where the insurance companies paid their fair share for the provision of services to protect life and property. But obviously they have got in the ear of the Coalition Government, which they did first in 2012, when the original reform proposal was announced. At the time the Coalition Government proposed an even more unfair scheme than the current one. Let us be clear about what the bill is. If the Christian Democratic Party, the Shooters, Fishers and Farmers Party, and the Coalition Government vote for it, they will be voting for a huge tax cut to the insurance industry and the transfer of that burden primarily to residential property owners across New South Wales.
This is a great big new tax on ordinary residents and it is a great big gift to the insurance industry. It has been dressed up as some sort of equity issue: “Isn’t it unfair that people who do not have insurance do not pay an appropriate amount of money for the fire brigade?” There are two answers to that. First, providing a fire brigade and fire and emergency services is a fundamental responsibility of government and should not depend upon capacity to pay. Linking the two is part of the Government’s ugly neoliberal agenda: “If you do not pay, you should not get the service.” It goes straight back to imperial Roman times, when Crassus provided the fire brigade. His team would turn up when the villa was burning down and say, “We have got the fire brigade out here. We would like to buy your villa from you.” The owners would ask, “What is the price?” and Crassus’ team would offer 50 per cent of the value. The home owner would say, “That is outrageous—50 per cent of the value!” The villa would keep burning and then Crassus would say, “We will offer you 40 per cent of the value.” That was the way he achieved a very substantial property portfolio in ancient Rome, and that kind of neoliberal agenda is exactly what this Government pursues: “If you do not pay, you should not get the service.”
The Greens have a fundamentally different view. We believe emergency services should be provided regardless of capacity to pay. Indeed, emergency services such as the fire brigade are a core responsibility of government and should be provided across the board. Instead, this Government proposes with this particular bill to put an even more unfair burden on residential property owners. We believe the provision of emergency services is a core responsibility of government and should be provided regardless of capacity to pay. The second argument that the Government uses is that there are these so-called “freeloaders” out there—the 5 per cent of people who have residential property and do not insure it. The Government says they are freeloaders because they are not paying the levy.
The Government describes the close to 40 per cent of property owners who do not insure their contents as freeloaders who are not paying their way. Let us be clear about the kinds of budget decisions people in those circumstances are making. Anybody who can afford to insure their property does insure their property, because they realise it is an investment of multiple hundreds of thousands of dollars, or maybe more than $1 million for some people in Sydney. If a person has the financial capacity to insure, they insure. When it comes to home and contents, ordinarily anyone who has the capacity to insure would insure.
So who are the people who are not insuring their properties or their home and contents? It is those people who simply do not have the money to do so. It is people who cannot afford to pay the insurance. Rather than saying, “Even if you cannot afford insurance, of course you should have the fire brigade and emergency services,” the Government’s response is to find a new and novel way to tax those people who cannot afford it. That is the deep inequity that lies at the core of this bill. The Government is looking for people it calls freeloaders. The Greens know that these are people simply trying to get by who do not have the money to pay for insurance. To target them to squeeze an extra $20 million to $50 million across New South Wales is base and ugly politics from the Government. The bill proposes to change how fire and emergency services are funded. It will abolish the emergency services insurance contribution scheme, with a levy on insurance products, and introduce instead a big new tax that will apply to all land across New South Wales.
Of course, when I say “all land” there is an exclusion for State government land and for Commonwealth land— because the Government has not worked out a way to tax Commonwealth land. But there is also one other project that is excluded: a public-private partnership run primarily run by a large private corporation. The Government has gone out of its way to exclude WestConnex, the private toll road, from the levy. The ugly highlight of this Government’s agenda is that not only is it privatising our infrastructure but it is now giving the owner of that privatised infrastructure a free ride on the levy. Who will have to make up the shortfall if WestConnex does not pay its fair share?
The shortfall will be made up primarily by those long-suffering residential land owners in Sydney, who are already next to financially crippled by paying their mortgages. This great big new tax brought in by the Coalition Government will commence on 1 July 2017. Obviously some strategic genius in the Coalition Government thinks a great big new tax nine months out from a State election is somehow politically attractive. I do not know who does the Government’s strategy planning, but this person obviously thinks a statewide, across‑the-board, massive new tax that kicks in on 1 July 2017, nine months out from the State election, is a good idea. Whoever thinks that is a good idea—
The Hon. Rober t Brown: Michael Photios.
Mr DAVID SHOEBRIDGE: I acknowledge the interjection. Poor old Michael Photios gets a very bad rap, does he not? I would suggest it is some genius in Cabinet who thinks a great big new tax—
The Hon. Niall Blair: Are you going to the polls next year?
Mr DAVID SHOEBRIDGE: I am sorry, 18 months out from a State election—
The Hon. Niall Blair: Are you going to the Senate?
Mr DAVID SHOEBRIDGE: They have found me out! But they will be pleased to know that I so love Sydney that I will be staying here—if I can afford to stay in Sydney. This great big new tax is a grand plan from the State Government. What will it actually mean for property owners around Sydney? The Government is citing an average levy of about $186 for property owners in Sydney. How much comfort will that offer to those who live in the central Sydney area? I am talking about the inner west, Parramatta, Canterbury-Bankstown, Burwood, Canada Bay, Hornsby, Ku-ring-gai, Ryde and Strathfield. In that area property owners will have to pay an average property levy of $361—almost double the $186 that the Government says will be paid. I am grateful to the Fire Brigade Employees Union [FBEU] for its analysis of the proposed levy, which I am quoting from.
For property owners in Sydney’s east, which is Bayside, Sydney, Hunters Hill, Georges River, Lane Cove, Northern Beaches, Mosman, North Sydney—where by-elections are about to happen—Randwick, Sutherland, Waverley, Willoughby and Woollahra, the average levy is not $186, which is what the Government is trying to spin in an attempt to throw dust in the eyes of voters in the lead-up to by-elections, but $471. That is more than double what the Government claims. The Government has said, “Don’t worry, people in Sydney’s west will be taken care of”. That is not true. The average levy on a residential property in Sydney’s west, which is Blacktown, the Blue Mountains, Camden, Campbelltown, Fairfield, Hawkesbury, Liverpool, Penrith and The Hills—I note that many people would argue whether the Blue Mountains is in Sydney’s west; it normally is if it wants funding from Sydney’s west but not when it is thinking about the Blue Mountains’ identity—
The Hon. Adam Searle: Are you slighting the people of the Blue Mountains?
Mr DAVID SH OEBRIDGE: No, I admire the way in which the people of the Blue Mountains have a malleable identity.
The Hon. Adam Searle: It’s diversity.
Mr DAVID SHOEBRIDGE: Yes, it is diversity. In Sydney’s west the average levy will be not $186 but $224. Of course, some households will pay substantially more than that. So who benefits? A good test of the motives of the State Government’s legislation is to work that out. In the case of this bill we know it is not going to be residential property owners, because they will have to pay a great big new tax. It is probably not going to be rural property owners, who will pay a similar share to what they pay now. There are two interest groups that benefit. Those who own commercial land will enjoy a substantial saving and will continue not to pay their fair share of the emergency services levy.
The industry that is smiling like the Cheshire cat and saying to the Coalition Government, “Thank you so much for monstering voters and giving us a $1 billion gift”, is the insurance industry. The insurers are getting an entire tax waived and they can sell more products while paying less tax. Why should the insurers pay the levy? It makes sense for insurers to pay the levy on fire brigades and emergency services because every time the fire brigade turns up and puts out a fire in a commercial property or prevents a property in the central business district from burning down, it saves the insurance industry a huge amount of money. Every time the fire brigade saves a residential property from burning down, it saves the insurance companies a huge amount of money.
The Hon. Shayne Mallard: That’s seventeenth century thinking.
Mr DAVID SHOEBRIDGE: I acknowledge the interjection. But that is not true. Indeed, at the beginning of the twentieth century, before we had a rational approach to fire brigades in New South Wales and before we ran a single public fire brigade in New South Wales, the fire brigade in this State was run by the insurance companies. The brigade would turn up at a fire and unless the building had a plaque on the front stating that it was insured by ABC Insurance Company, the fire brigade would say, “Sorry, this building is not in the contract and we are not going to save it”. The insurance companies realised, and continue to realise, that they gain a huge benefit from the services provided by fire brigades. Insurance companies were not providing fire brigades because they were nice guys. Insurance companies were providing fire brigades—and should pay for fire brigades—because having fire brigades saves them money in the long term.
However, instead of the insurers paying for the service that saves them money, this Government says, “No, ordinary mums and dads, residential property owners, should pay twice—they should pay for their insurance and they should pay a separate levy for the fire brigade to further bolster the profits of insurance companies”. That is the kind of wrong-headed thinking that is driving the Coalition Government’s ugly, pro-insurance agenda. The FBEU I believe provided all members with a detailed briefing about the union’s thinking on this levy. The union has an interest in this issue—it is pretty much the specialist on providing emergency services in New South Wales. It represents an amazing bunch of people, who bravely put their lives on the line in putting out fires and saving property and life in New South Wales. They know what they are talking about.
The PRESIDENT: Order! I call the Hon. Dr Peter Phelps to order for the first time. I take this opportunity to welcome to the Parliament and to the Legislative Council student leaders from high schools in New South Wales who are attending the Secondary Schools Leadership Program conducted by the Parliamentary Education unit. I trust that you will not only learn from your experience today but also enjoy your time at Parliament House. I am sure all honourable members join me in welcoming you to the Legislative Council.
Mr DAVID SHOEBRIDGE: The FBEU made a series of key points in its briefing documentation. The first is:
The current system is not a levy on individual insurance policies, rather a levy on insurance companies. Not all insurance companies express this levy (which is simply another cost of doing business) as a levy on their policy holders.
So it is wrong to suggest that this an individual levy on policyholders. It is a levy that the insurance company has to pay, and the insurance companies themselves choose how much they will levy individual policyholders. But the tax is a tax on the insurance companies, and it is quite rightly a tax on the insurance companies because they benefit from the service. The Fire Brigade Employees Union [FBU] also says:
The Government’s Emergency Services Property Levy [ESPL] is a brazen attempt at cost shifting from big business to the community, transforming insurers from major funders of the Rural Fire Service [RFS], Fire and Rescue NSW [FRMSW] and the State Emergency Service [SES] into the greatest “free-riders” of them all insofar as they will remain major beneficiaries of these services without contributing to them at all.
I say again, we can just picture the insurance industry with its huge Cheshire cat style grin sitting over there on the Government benches. It is grinning away at this amazing billion-dollar victory that it will have as a result of this legislation. The FBU then says:
Any new funding model must remain responsive to the funding needs of the services and ensure that any revenue is used solely for the purpose for which it is raised.
Given there is no levy for Police or Ambulance services, why should there be a levy (land based or otherwise) for fire services?
I think that is pretty fair. Why are fires services being treated differently to ambulance and police services? Everybody agrees that core emergency services, apart perhaps from an ideological minority, provided by the State Government include ambulance, police and fire services. Yet for some reason this Government is stuck in a nineteenth century view, or rather an ancient Roman view, of user-pays for fire services. These should instead be part of the core services provided by consolidated revenue in New South Wales, and paid for partly by consolidated revenue but largely by the insurance companies, who get the benefit of these services.
The bill provides that the relevant proportion that will be paid by the different property sectors is as follows: public benefit land is only paying a fraction, about one-third of 1 per cent; farmland is paying a little under 5 per cent, and that is not dissimilar to the call-out rates for farmland; industrial land is paying about 10.4 per cent; and commercial land pays about 26.66 per cent. Residential land is where they whack the levy. Residential land will be paying 58 per cent of the property levy on this. So let us compare that to who actually uses the system. Under the current system, before this new levy, residential owners are paying just 45 per cent of the levy. The Government now wants them to pay 58 per cent of the levy. We would think, therefore, that if we have a look at the call-out rates then we would see that the Government is simply matching the funding contribution to the callout call-out rates.
So who is using this service? If this is based on a user-pays idea, then who is using the service? In fact at the moment residential users comprise only 34 per cent of the callouts. Yet they will be asked to pay 58 per cent of the levy. They account for 34 per cent of the call outs, but they will be asked to pay 58 per cent of the levy. Industrial and commercial users make up 55 per cent of the call outs, but they are only being asked to pay a little over 37 per cent of the levy. This is a huge cost shift to the residential owners, who make up only 34 per cent of the call outs but will be paying 58 per cent of the levy, from the business owners, who account for 55 per cent of the call outs but are only being asked to contribute 37 per cent of the levy. It is even worse than that, because the capital investment required to deal with residential fires is much smaller than the capital investment required to deal with commercial fires. [Time expired.]