The funding model for the Fire Service is outdated and unfair and needs to change, the Insurance Council has said.
A report by the Institute of Economic Research recommends funding for the service moves away from insurance-based levies to other options including general taxation.
The report said the current model is the worst option for funding fire services.
Insurance Council chief executive Tim Grafton said Britain and most Australian states no longer use the model.
He said general taxation or a system based on the capital value of property are better options because they spread the cost across everyone, not just those who are insured.