17 FEBRUARY 2026

 

ILLAWARRA BUSINESSES WELCOME ACTION ON UNAFFORDABLE HIGH INSURANCE COSTS

 

Business Illawarra has welcomed long‑awaited momentum on fixing the Emergency Services Levy (ESL), saying meaningful reform is critical for local operators increasingly being priced out of essential insurance.

 

The NSW Government’s decision to refer ESL reform to a parliamentary inquiry marks a significant shift in the state’s approach to spiralling premiums. The ESL currently adds at least 23 per cent to the average business insurance bill, with NSW raising $1.3 billion through the levy in 2024–25.

 

Local businesses across the Illawarra, Shoalhaven and Southern Highlands have been sounding the alarm for years. Rising insurance costs have consistently ranked as the number‑one cost pressure for NSW businesses since 2023, and our businesses are no exception. 

 

Recent regional survey results highlight that businesses in the region continue to face sharp increases in insurance costs, compounding pressures from skills shortages and softening consumer spending. 

 

Coralie McCarthy, Director of Business Illawarra, said the urgent need for insurance reform is clearly reflected in the experiences of local businesses.

 

“Businesses throughout the Illawarra, South Coast and Highlands have been raising the alarm about soaring insurance costs for years, and the impact is now impossible to ignore. From small operators to major employers, the rising cost of simply staying insured is putting jobs, investment and community resilience at risk. So many businesses we speak to are either significantly under insured or no longer insured at all” Ms McCarthy said. 

 

“Reforming the Emergency Services Levy is a critical step toward restoring fairness and affordability. Our region is highly exposed to natural disasters, and businesses need insurance. The risk is huge for local families. We need a modern funding model that supports businesses, not one that pushes them out of the insurance market altogether, its short term gain for long term impact when businesses can’t recover in disasters without insurance!” Ms McCarthy said. 

 

“This inquiry is a welcome sign that NSW is finally taking this issue seriously. We urge all sides of politics to work together to deliver a sustainable, transparent system that keeps the Illawarra, South Coast and Highlands economically strong and protects the communities that rely on local business most. We need our local small business, surly, as we now are years past black summer and the many floods since, we have learned something!”

 

NSW remains the only mainland state still relying on an insurance‑based levy to fund emergency services, long after other jurisdictions have transitioned to broader property‑based models. 

 

With the Government also preparing an options paper outlining five potential levy models, Ms McCarthy said local businesses are looking for reform that will reverse years of mounting pressure and restore confidence.

 

“Businesses want a system that is fair, sustainable and future‑focused. Our region cannot afford to see more businesses priced out of insurance — this reform is essential to protecting our economic strength and community resilience.”

 

 

Media Contact 

 

Coralie McCarthy 

Director, Business Illawarra

M: 0417 431 564

E Coralie.McCarthy@businessnsw.com

 

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About Business Illawarra

 

Business Illawarra is the region’s peak business organisation; a not-for-profit advocacy group dedicated to the economic development of the Illawarra, Shoalhaven and Southern Highlands. On behalf of our members, we develop policy and are the leading voice representing business across the region. 

 

Business Illawarra is owned and supported by Business NSW, the state's leading advocacy voice for business across NSW. Of the few enduring, independent, not-for-profit organisations in Australia, Business NSW is the only one focused on the wellbeing of the business community. Our purpose has always been to provide a strong advocate to all levels of government on issues affecting businesses, undertake research to guide greater public and private sector investment in economic infrastructure, and support the development of workforce capacity and skills in our region.