10 Aug 2012

Govt biggest freeloader on fire levies: union

8:45 pm on 10 August 2012

The firefighters union says the Government, which has just announced a review of the way the Fire Service is funded, is the biggest freeloader on the service.

The Fire Service is paid for by a levy on insurance, so those who don't pay insurance get the service for free.

The Professional Firefighters Union says many state agencies fall into this category.

The Internal Affairs Minister has confirmed that some government departments are not paying levies to the Fire Service because they do not have full insurance.

Chris Tremain, who announced the review of the way the Fire Service is funded, says some state agencies, including Housing New Zealand, make voluntary payments to the service.

He says the review panel may find the Crown is not paying its fair share, but that does not mean the Government will be able to find the extra money.

Commercial property owners avoiding levy: union

The union says some commercial property owners are using legal loopholes to avoid paying fire insurance levies which leaves home-owners to pick up the tab.

Professional Firefighters Union says the review is needed to fix the funding model, which allows those property owners to free-ride.

"Sixty percent of the fire service resources are deployed to protect commercial property, yet they only contribute 40% of the cost, so the residential house-owner is subsidising big business to a significant degree," said national secretary Derek Best.

Mr Best said that problems with the current funding model have been well-known for a long time, but previous governments have failed to deal with them.

The Fire Service won't comment until the review is complete.

But in a briefing to the incoming minister, fire officials acknowledged that businesses are avoiding paying their fair share.

Insurers' comment

The Insurance Council says the current system of funding the Fire Service through insurance is inefficient and unfair.

The council's chief executive, Chris Ryan, says Government taxes and levies can double the cost of insurance, which deters some people from getting any cover at all.

He says these people are freeloading off the people who are insured, which is unfair on them.

Mr Ryan says if everyone paid the levy, it would become cheaper overall.