New Zealand's government has ordered a review of how Fire and Emergency New Zealand is funded, with Internal Affairs minister Brooke van Velden directing the Department of Internal Affairs to examine whether alternatives to the current insurance levy model are warranted.
Under the existing system, 95% of FENZ's income is raised through levies on property insurance policies covering fire risk - a model that has been in place since the Fire Service levy was introduced in 1975. Van Velden said the funding structure has not kept pace with the expansion of FENZ's mandate.
"The Fire and Emergency New Zealand Act 2017 added a number of non-fire related functions for FENZ to perform, such as responding to medical emergencies, maritime incidents, and severe weather events and disasters," she said. "Given the widened mandate, there is a valid question about whether this model is fair for levy payers and fit for purpose."
The data supports that concern directly. From July 1, 2025, to March 31, 2026, only 59% of incidents FENZ responded to - including false alarms - were fire-related. Property insurance levy payers are, in effect, funding nearly half of a national emergency service whose scope now extends well beyond the risk they are being charged to cover.
The minister also flagged a longstanding structural problem with the current model: free-riding, where uninsured property owners rely on FENZ services without contributing to the levy that funds them. The problem is not unique to New Zealand - similar tensions between insurance-based emergency service levies and uninsured populations have been documented in Australia and parts of Europe - but it has become more acute as FENZ's non-fire mandate has expanded, widening the gap between who benefits from the service and who pays for it.
The Department of Internal Affairs will engage with targeted stakeholders as part of the process, considering both the shortcomings of the existing system and the feasibility of alternative approaches. "It is important that the revenue collected to fund Fire and Emergency is reliable, fit for purpose and future proof," van Velden said. "This work will give us greater understanding about whether insurance is the only feasible collection method, or if there are other practical alternatives."
Van Velden confirmed the review will not affect the new levy rates already set for the three years commencing July 1, and is intended to inform any future regulatory or legislative decisions around fire and emergency services funding.
