Frequently Asked Questions - FENZ Funding Review

Is this a new tax?

No, Fire and Emergency New Zealand is funded through a levy on property insurance so for most people and businesses, this review won’t lead to a new cost. The review isn't about how much funding Fire and Emergency gets, but the way it is collected.

Wasn't the fire service reviewed recently?

Yes, and the levy was also updated as part of this review. However, only insurance-based options for funding Fire and Emergency were considered at the time. This review is looking at a wider range of options.

How will the review affect how much I have to pay?

The current levy regime will remain in place for the duration of the review, so there won’t be any immediate change to the amount you’re paying. In this first stage of the review we are comparing high-level options on the preferred funding model for Fire and Emergency. More detailed consultation will occur before any change is made to the amount that levy payers are paying under the new system.

What about funding for other emergency services?

Fire and Emergency is a Crown entity that has been traditionally funded through a levy. Other emergency services have their own funding sources and are outside the scope of this review.

Why isn't funding Fire and Emergency from general taxation an option?

The services provided by Fire and Emergency already fit within Treasury’s framework for recovering costs through a levy. We are not seeking to move away from this approach at this stage of the funding review. The review is primarily concerned with identifying if there is a more appropriate way of recovering Fire and Emergency's costs through an alternative levy funding source.

How is this review related to Fire and Emergency’s structural changes?

The proposed organisational changes at Fire and Emergency are a part of the process to amalgamate New Zealand’s urban, rural and volunteer fire services into a single unified organisation. The Government’s funding review is not related to this process.

How many submissions did you receive in the first phase of the review?

The Department received 71 written submissions. During the consultation period the Department also held 13 public meetings and hui. A summary of the submissions received is available here: https://www.dia.govt.nz/diawebsite.nsf/Files/FENZ/$file/FENZ-funding-review-subs-summary-and-analysis.pdf

Why is a property-based model off the table?

It is unlikely that the benefits of implementing a property-based model would outweigh the significant costs of changing funding models.

So there's not going to be a change in how levy is charged?

Levy will continue to be collected by insurers and insurance brokers. The way in which levy is charged is still being worked on - the Department will continue to work with stakeholders to make improvements to the insurance-based model where possible.

Why do a funding review if you are just going to retain an insurance-based model?

The purpose of the Fire and Emergency funding review wasn't to change funding models, but to see whether a better funding model could be implemented. An insurance-based levy system has long been a feature of funding NZ's fire services. When Fire and Emergency was established, no alternative funding models were considered. The review provided an opportunity to see if there was another way of funding Fire and Emergency suitable for the New Zealand context.

How will this affect how much levy I pay?

We are not looking at how much different levy payers will be paying at this stage of the review – we are focussing on improving the system which sets out who is responsible for paying the fire levy. There will be public consultation prior to any change in the amount of levy for which people are responsible.

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