The Insurance Council of New Zealand (ICNZ) has called on political parties to support public taxpayer funding of Fire and Emergency New Zealand (FENZ), rather than through insurance levies.
ICNZ released the statement in response to the summary of the submissions for FENZ’s funding review, which was announced by Minister of Internal Affairs Tracy Martin in March 2019.
“ICNZ supports a strong fire service that is integrated appropriately with other emergency services and properly funded,” said Tim Grafton, the organisation’s chief executive.
“We have never considered that funding FENZ through a levy on insurance is appropriate and we’re pleased with the overwhelming support from the submissions for future funding to be supported by general taxation. It’s now time this was implemented.”
Read more: Where to with the Fire Levy?
According to the insurance body, it believes that full taxpayer funding of FENZ is the best option, but it is also open to having a mixed model – which includes a greater contribution from the Crown, via general taxation, combined with direct levies on property and motor vehicles.
ICNZ criticized the current levy model of funding, saying that it lacks universality due to not every property being insured. It also mentioned that FENZ’s mandate includes responses to non-fire emergencies like medical emergencies and natural disasters, meaning not all of its activities are linked to property insurance.
The levy, ICNZ said, has distortionary effects on the insurance market, as it makes insurance more expensive for consumers and creates barriers for new insurers to enter the market.
“Unlike other services that help keep our communities safe, like the police, FENZ is funded by a levy imposed only on people who take out insurance to protect their homes, contents, motor vehicles and other property,” Grafton said.
“This is a grossly unfair model that doesn’t accurately reflect the nature and breadth of FENZ’s work and penalises people who try to do the right thing to protect their assets.”