Two unions are filing legal proceedings against Fire and Emergency New Zealand (FENZ) over a disputed restructure. For the insurance industry, the more immediate concern is a Serious Fraud Office (SFO) referral connected to how FENZ administers the levy collected through insurance premiums.
FENZ is primarily funded through a levy on insurance contracts covering property in New Zealand against fire risk, under Part 3 of the Fire and Emergency New Zealand Act 2017.
Brokers and insurers collect that levy on the government’s behalf. There is no payment for doing so. It is a statutory function.
According to Parliament’s Governance and Administration Committee, which published its 2024/25 annual review of FENZ in March 2026, revenue from levies represents 95% of FENZ’s total revenue. In 2024/25, FENZ reported total revenue of $838 million. Levy revenue came in at $796.7 million – $29.8 million, or 3.6%, below budget. The committee noted this was the first time the levy base had declined year-on-year in almost two decades.
That collection mechanism is now the subject of an active Serious Fraud Office matter.
Read next: Parliamentary committee loses confidence in FENZ ahead of election
On September 17, Internal Affairs Minister Brooke van Velden told media she had lost confidence in FENZ chief executive Kerry Gregory after he withheld information from her for a full year about a “seriously significant incident.”
The following day, van Velden told 1News that FENZ had been “breaching their own law in regards to levy collections” – and had concluded she did not need to know about it.
She said she became aware only because board chair Raveen Jaduram told her directly, describing the episode as “completely unacceptable” and pointing to “a lack of accountability across the public service.”
FENZ had spent nearly half a million dollars investigating the matter without informing the minister.
A FENZ spokesperson confirmed that the matter was historical – predating 2021 – and related to the agency’s administration of the levy scheme. “Fire and Emergency has proactively referred the matter to the SFO, and it is now with them to consider,” the spokesperson said.
An SFO referral does not establish wrongdoing. No findings have been made.
The SFO referral arrives as FENZ faces structural levy pressure from multiple directions.
The parliamentary annual review identified three factors affecting levy revenue: slower growth reflecting economic conditions; reduced insurance demand as premiums rise; and uncertainty around the July 2026 shift in commercial property levy calculation from indemnity value to sum insured, which carries a risk of further revenue reduction.
The government confirmed a 2.2% levy rate increase from July 2026 – down from the 5.2% FENZ had consulted on. The minister directed FENZ to deliver $60 million in savings over the three-year levy period. The FENZ board subsequently sought a further $90 million in savings, bringing its total target to $150 million by 2029.
Motor vehicle insurance – including third-party only cover – now also attracts the levy under the Fire and Emergency New Zealand (Levy) Regulations 2024.
The New Zealand Professional Firefighters Union (NZPFU) and the Public Service Association (PSA) confirmed legal proceedings will be filed over a FENZ restructure covering more than 160 positions.
The unions wrote to Jaduram citing inadequate consultation and loss of confidence in FENZ’s leadership. He declined to intervene, and proceedings were confirmed.
This follows an earlier challenge. In November 2025, FENZ released a 260-page restructure document. The unions filed urgent proceedings, and in March 2026 the Employment Relations Authority (ERA) found FENZ had not met its consultation obligations, stating: “These are not the actions of an employer who is being active and constructive in establishing and maintaining a productive employment relationship that involves being responsive and communicative with the other party to the employment relationship, which in this case is the Unions.”
Since that ruling, FENZ has provided some – though not all – of the information requested. Both unions say the process remains inadequate.
The Governance and Administration Committee’s 2024/25 annual review found that only 69% of FENZ’s fleet was within its target lifespan of 20 to 25 years, and that roughly 30% was at or near end of life. Current budgets were found to be insufficient to bring the fleet to the required standard over the next decade.
The committee also documented repeated inconsistencies in FENZ’s answers about the 30 Type 3 trucks ordered in August 2019 – none of which were in operational use as of February 2026. The report stated the committee “remain[ed] seriously concerned about the many different answers to our questions, the state of the FENZ fleet, and the perception created by this series of answers which has caused a loss of confidence in FENZ.”
Read next: Firefighter petition puts FENZ’s $800 million levy under scrutiny
NZPFU National Secretary Wattie Watson called for an independent investigation into how FENZ has managed levy funding since its inception and said the restructure must not proceed while governance questions remain open.
“There is a very real risk that the information relied upon is not correct or accurate. The basis, intent, and outcomes claimed by FENZ must be independently reviewed in light of the exposure of the crisis of confidence,” Watson said.
Brokers remitting close to $800 million in levy revenue to FENZ each year have a direct stake in what the SFO’s examination finds.
