7 Apr 2024

Minister 'not convinced' Fire and Emergency needs further levy boost

5:48 pm on 7 April 2024
ACT Deputy Leader Brooke van Velden

Internal Affairs Minister Brooke van Velden. Photo: RNZ / Angus Dreaver

Internal Affairs Minister Brooke van Velden is asking Fire and Emergency New Zealand (FENZ) to prove it needs a further boost to the levy they collect on insurance.

With only $10m paid in direct Crown funding, FENZ is almost entirely funded through the levy and the service's expenses have increased about $200 million since 2018.

FENZ released a consultation document on Sunday recommending an increase to the levy.

A briefing van Velden received in November warned the 12.8 percent increase to the levy set to begin from July, which is paid through vehicle, house and other property insurance, would be only a stopgap measure.

However, the insurance industry has argued the increases are unfair because they allow those without insurance to avoid contributing, and they have lobbied for the levy to be scrapped and replaced with something else.

In a statement on Sunday afternoon, van Velden said she recognised FENZ carried out critical frontline services and needed funding to do so, but "I also consider it important that FENZ demonstrates a high level of accountability".

She said she was "not yet convinced" a further 5.2 percent increase pegged for 2026 to 2029 was justified, and wrote a letter to FENZ.

In it, she requested evidence of the need for the increase, and a "description of the key outcomes that this increase would achieve and that FENZ would be held accountable for achieving".

"I am seeking a commitment from Fire and Emergency NZ (FENZ) to cost savings where appropriate to keep levies affordable for New Zealand households and businesses," van Velden said.

"It is levy payers - individuals, households, and businesses - who will pay for any increase."

She also asked FENZ for an analysis of the effects a smaller increase would have while still allowing FENZ to provide its services and invest in future needs, including the effect of that lower level of funding.

The minister said she would take recommendations on the levy to Cabinet after FENZ had completed its consultation.

Get the RNZ app

for ad-free news and current affairs