Improving Fire and Emergency's funding model

8 December 2021

The Government is proposing two key changes to the levy regime that will fund Fire and Emergency New Zealand from 1 July 2024.

Suzanne Doig, General Manager Policy Group, says: “The first change will see the Fire and Emergency levy charged on insurance policies for fire damage instead of policies for any material damage, for example, flood or earthquake damage. This will minimise implementation costs while still providing for wide coverage of levy payers.

“The second change will see the levy calculated on the ‘sum insured’ rather than the ‘amount insured’ in a contract, to align better with how insurance policies are written in New Zealand. This will promote efficiency while adhering to the principles of the Fire and Emergency New Zealand Act 2017.”

These changes will have little to no impact for motorists and people with residential home and contents insurance. The impacts for non-residential property owners will depend on how their insurance contracts are structured. Generally, a small proportion of non-residential property owners should avoid relatively large levy increases that would have occurred without these changes. The remainder of non-residential property owners may not experience relatively small levy decreases.

“Making these changes will also avoid significant implementation costs and ongoing increased administrative costs being added to the funding system. The intention is that the changes will come into force alongside the rest of the updated levy system on 1 July 2024.”

Public consultation on a draft Bill making these amendments will be undertaken in early 2022. Further public consultation will then take place before any change to the levy amount is made.

The proposed changes result from a review by Te Tari Taiwhenua Department of Internal Affairs into Fire and Emergency's funding system, which the Government commissioned in 2019 in response to stakeholder concerns. Earlier this year, the funding review recommended retaining an insurance-based model. One of the Department’s roles is to provide policy advice to support the Minister of Internal Affairs, who is responsible for monitoring the performance of Fire and Emergency.


More information on the Fire and Emergency funding review can be found here: www.dia.govt.nz/firefundingreview