Source: Insurance Council of NZ
The Insurance Council of New Zealand | Te Kāhui Inihua o Aotearoa (ICNZ) has welcomed the Government’s decision to review how Fire and Emergency New Zealand (FENZ) is funded.
ICNZ Chief Executive Kris Faafoi said the review is a timely and positive step toward ensuring the long-term sustainability of a critical public service.
“Fire and Emergency New Zealand provides an essential service to communities across the country, and it is important it is funded in a way that is sustainable, fair and fit for the future.
“The current model relies on a levy applied to insurance premiums. While this has been in place for many years, insurers have long questioned whether it remains the most appropriate way to fund such a core public service.”
Kris Faafoi said continued reliance on insurance levies risks adding pressure to premiums over time, affecting affordability for households and businesses.
“When premiums rise, there is a real risk people reduce their cover or go without it altogether. That has broader consequences for individuals, communities and the wider economy.
The Minister of Internal Affairs, Brooke van Velden, also highlighted fairness concerns, as Fire and Emergency services are used by all New Zealanders, regardless of whether they hold insurance.
“Ensuring FENZ has a stable and sustainable funding base is essential. At the same time, linking that funding directly to insurance raises longer-term challenges,” Kris Faafoi said.
Mr Faafoi said the review should also sit alongside the need for sustained investment in resilience.
“Our proposed Community Protection Levy is a practical option to help fund large-scale risk reduction, supporting communities to better withstand natural hazards and help keep insurance affordable and accessible over the long term.”
As part of the review, ICNZ also expects officials to examine international approaches as many comparable jurisdictions fund fire and emergency services through central or local government.
“We look forward to engaging constructively with officials as they consider options, including overseas models, to ensure FENZ is well-supported into the future,” Kris Faafoi said.
“The review provides an opportunity to step back and take a considered look at how best to fund a vital public service, while easing pressure on insurance premiums over time.”