New Zealand’s parliamentary oversight committee said in March 2026 that it had reached a “loss of confidence” in Fire and Emergency New Zealand (FENZ) after receiving contradictory answers about its fire truck fleet across multiple hearings.
That finding – from the Governance and Administration Committee’s 2024-25 annual review of FENZ – is the starting point for what National and Labour each announced on September 23. Both parties are responding to the same documented failures. Neither has told brokers what those responses mean for the levy sitting inside every fire and motor insurance contract in New Zealand.
The fire levy is not background detail. It is a charge that brokers calculate, collect, and remit for every client holding fire or motor cover – without compensation, according to the Insurance Council of New Zealand (ICNZ).
Levies on property and vehicle insurance supplied 95% of FENZ’s $838 million total revenue in 2024-25, per the parliamentary annual review. ICNZ figures show the charge adds approximately 5% to a standard home insurance premium and around 9% across all products subject to it.
From July 1, 2026, the calculation basis for commercial property shifted from indemnity value to sum insured. Rates are fixed for three years – but the levy base is already shrinking. FENZ’s 2024-25 levy revenue came in $29.8 million, or 3.6%, below budget. It was the first year-on-year decline in nearly two decades, attributed by the parliamentary review to reduced insurance volumes, lower cover levels, and fewer contract works policies. FENZ has since flagged the shift to sum insured may reduce commercial levy collections further.
Neither ICNZ nor the Insurance Brokers Association of New Zealand (IBANZ) had publicly responded to the election announcements at the time of publication.
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National’s emergency management spokesperson Mark Mitchell announced the party would convert FENZ into a departmental agency directly accountable to the minister for emergency management, removing its independent board.
“These aren’t issues that have just emerged overnight. It has taken two years to do that thorough inquiry but that was a big piece of work. What that has done is informed us to be able to come forward with a policy like this to address those issues that were identified,” Mitchell told RNZ.
Internal Affairs Minister Tim Costley said no additional funding would be required: “It’s not a funding issue here, it’s an operational one.”
On the levy, Mitchell did not rule out a future increase – saying only there were no current plans to raise it.
Labour’s internal affairs spokesperson Lemauga Lydia Sosen said the party would commission an independent review of FENZ’s funding and operations.
“National has had three years to get behind our emergency services but instead, they cut $50 million a year from FENZ. Our firefighters put their lives on the line every day to keep communities safe. Being properly backed to do their jobs is the least they deserve. The situation at FENZ is untenable,” she said.
The $50 million figure requires context. RNZ reported in November 2025 that it refers to an internal FENZ savings target set by chief executive Kerry Gregory in response to declining levy revenue – not a government-imposed cut. Gregory told staff the agency needed to save $50 million per year from 2026-27 because levy income had become “less reliable.”
Labour has not detailed the scope, timeline, or funding implications of its proposed review. ACT, the Greens, and New Zealand First had not released specific FENZ policies at the time of publication.
The parliamentary annual review sets out the operational problems driving both parties’ positions. Thirty Type 3 fire appliances ordered in 2019 are still not in operational service. The committee received conflicting answers across successive hearings – told first the majority were running, then that none were, then varying numbers again. All 30 are now expected to be operational by June 2027.
Roughly 30% of FENZ’s approximately 1,500-strong fleet is at or near end of life. The committee found there is insufficient budget over the next decade to bring it to standard at current spending levels.
The Rotorua live fire training facility also closed in January 2026 after safety notices were issued, leaving Auckland Airport as the country’s only active live fire training site.
An unresolved pay dispute between FENZ and the New Zealand Professional Firefighters Union (NZPFU) has run alongside these governance problems. No collective agreement has been in place since June 2024, with one-hour stoppages continuing into August 2026.
The practical consequences are documented. On January 9, 2026, a commercial fire broke out at a grocery business in Pakuranga, Auckland, during a strike hour. Because career firefighters were unavailable, volunteer crews took 30 minutes to reach the site, 1News reported. FENZ confirmed the nearest paid crew from Mt Wellington would have arrived within seven minutes.
For brokers with commercial clients holding material damage or business interruption policies, a gap of that duration directly affects the size of a loss and the length of any indemnity period.
The firefighters’ union presented a petition to Parliament on September 23 seeking improved pay.
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Both proposals set aside the model-level concern that ICNZ and the Property Council of New Zealand have raised for years: the levy’s design no longer reflects what FENZ does.
Between July 2025 and March 2026, only 59% of FENZ incidents were fire-related, per government data. Medical emergencies, maritime incidents, severe weather, and false alarms made up the rest – services whose costs fall entirely on insured households and businesses.
The Department of Internal Affairs is examining funding alternatives, including direct Crown funding and a rates-based model. No changes have been announced.
For brokers, the position heading into the election is this: a levy base that has declined for the first time in two decades, rates fixed for three years with no long-term certainty beyond that, a structural review under way, and two major parties offering governance changes without confirming what either means for the charge their clients pay every time they renew fire cover.
