Pensioner discounts promised for new NSW fire levy

The levy will replace the current Emergency Services Levy on home insurance policies in a move the State Government says will be fairer for householders.

The government has promised discounts will be put in place for pensioners and concession cardholders.

However Opposition emergency services spokesman Michael Daley said the change amounted to a "brand new land tax" which would disadvantage homeowners doing it tough.

Treasurer Gladys Berejiklian said the change would benefit insured home owners, with insurance premiums expected to fall about $200 a year as a result.

Professor Allan Fels has been appointed to monitor insurers and ensure they pass on the savings.

Companies that fail to reduce premiums despite no longer having to pay the levy on insurance will face fines of up to $10 million.

"Under the current funding model, NSW property owners who insure their properties are subsidising households who don't purchase contents or building insurance," Ms Berejiklian said.

"Fire does not discriminate and the community rightly expects that firefighting and SES services will be available to everyone in their time of need.

"It is also fair to expect all property owners to pay their share for these vital services.

"The government expects that the vast majority of insured residential property owners will be better off under the Emergency Services Property Levy, with the average insured property owner saving around $40 per year."

The levy will be based on unimproved land values and will be collected by local councils on behalf of the State Government.

Key stakeholders will now be part of a consultation process on implementation of the reforms.