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Millstone: The Fire Services Levy
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Millstone: The Fire Services Levy
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The decision to increase the Fire Brigade’s rescue responsibilities impacts little on the funding arrangements that the Government has with the NSW Fire Brigades because the costs will be borne by the private sector through the Fire Services Levy. This Levy accounts for 73.7 per cent of funding for the NSW Fire Brigades. Local governments contribute 12.3 per cent and the State Government just 14 per cent.
The Levy is collected by insurance companies from insurance policy holders. Any increase in the cost of the provision of services provided by the NSW Fire Brigades is passed on to consumers purchasing insurance products. These consumers will bear the financial burden of rescue services not the State Government, and not the uninsured.
A Parliamentary review of fire services funding in 2004 investigated this inequity. It reported that: “It is inequitable that those who do not insure or under-insure their properties benefit from fire services….It is difficult to obtain reliable information on the extent of non-insurance and under-insurance with estimates of non-insurance in households ranging from 4.5 per cent to 25 per cent. Some surveys indicate that up to 17 per cent of small businesses are not insured. Around 7.5 per cent of residential buildings and 35 per cent of contents are insured for less than 70 per cent of their replacement value.”
The Insurance Council of Australia has been lobbying for change. In a submission to the NSW Independent Pricing and Regulatory Tribunal (IPART), which conducted a review into State taxation in 2007, the high cost of insurance in NSW was highlighted:
· the general insurance sector is currently subject to the ‘cascading’ effects of three types of taxation (referred to as a ‘tax on a tax on a tax’ by Hon. Justice Owen during the HIH Royal Commission); these taxes – fire contributions, GST and insurance stamp duties – can add up to 40% extra to the cost of a basic household property premium and up to 60% for a commercial insurance premium
· since the introduction of the New Tax System in 2000, overall general insurance taxes have increased at nearly twice the rate of all other forms of state taxation
· on a per capita basis, the NSW population pays approximately $166 in general insurance taxes compared with an average of $159 nationally or an average of all States excluding NSW of $155
· NSW insurance premium based taxes (excluding value added/consumption taxes) are around three times as large as the comparable international average
The Insurance Council of Australia has raised the issue of fiscal responsibility and accountability with government. It points out that ‘overall the expenses and revenues of the fire services have grown at a faster rate than the general government’s revenues and expenses’. It highlighted a number of points:
· the levies imposed on the general insurance sector to fund the NSW Fire Brigades have risen by 6.9% per annum while total taxation revenue in NSW has risen by only 3.6% pa.
· On average, the NSW Fire Brigades exceeded its budgeted operating costs by $16.8m or 4.4% per annum, with operating expenses exceeding budget in each of the ten years to June 2007
· Operating expenses for the NSW Fire Brigades have risen on average by 7.5% pa over the nine years to June 2007 compared with growth in general government expenses of only 6.0%
· The NSW Fire Brigade’s EFT employee related operating expenses rose by 5.7% pa over the nine years to June 2007 compared with 4.2% growth in the public sector labour price index for NSW
Recently released figures for NSW Fire Brigade funding indicate total expenses in 2008-09 are budgeted to be $532.4 million, an increase of 5.6 per cent on the 2007-08 Budget.
These funding arrangements create inequities between the Fire Brigades and other emergency services. For Paramedics, in particular, it has become increasingly difficult to forge a meaningful role in frontline emergency services. In the past there was the development of the ‘Paramedic’ system, Rescue and SCAT (Special Casualty Access Teams); and a more ‘holistic’ patient-care philosophy that included accessing, extricating, treating and transporting patients. In the present system, the Ambulance Service, positioned within the Department of Health portfolio and not Emergency Services like the NSW Fire Brigades, is busy accommodating serious shortcomings in public hospital emergency departments across NSW.
Ambulance Paramedics are increasingly being absorbed into an ailing Health system.
They are positioned in corridors to care for patients that the hospitals would like to but are unable to care for. They are being recruited into ‘extended care’ Paramedic positions where Paramedics do not provide ‘pre-hospital’ care, but ‘out of hospital’ care, in a desperate bid to keep patients away from crowded emergency departments.
Meanwhile, the NSW Fire Brigades has been purchasing rescue vehicles and equipment, recruiting staff and implementing rosters, in areas where they did not have a primary rescue role. This is how it was possible for the Fire Brigades to assume the primary rescue role from Ambulance Rescue at such short notice.
