The Insurance Council of New Zealand has hit out at the government’s decision to continue funding Fire and Emergency New Zealand through a levy model. 

Following a review, policymakers concluded insurance premiums should continue to fund FENZ for the foreseeable future.

The ICNZ disagrees with the model and wants the Government to make a larger contribution to FENZ costs.

ICNZ chief executive Tim Grafton said the current model was unfair. 

“Continuing to tax people for a public good such as fire and emergency services is out of step internationally. The evidence shows that other countries have had no difficulty in funding these services in other ways.”

He added: “We disagree with the analysis that the levy is fit for purpose to fund the fire service for the future and we disagree that FENZ can’t be funded another way.  New Zealand will be the last country standing on making insurance less affordable by taxing people who choose to insure. 

“Governments around the world understand the important role insurance plays in rebuilding an economy after a natural disaster and encourage as many people as possible to insure.  The tax on insurance costs New Zealanders about $600 million each year” he said.

“It is not a fair tax because people that are doing the right thing by insuring are paying for fire and emergency services for everyone. It is bad for consumers, it is bad for insurers and it is bad for [the] government.

“Consumers pay more for their insurance, insurers are left to administer a complex collection service, and the government has no firm forecasts for budgeting because it depends on whether people insure or not.”

“While we are disappointed with the outcome, we will of course continue to engage constructively with the Minister and her advisers and we look forward to meeting in due course” Grafton added.

June 2021

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