The NZ Government is under mounting pressure to modify or dump plans to radically overhaul fire services and how they are funded, according to the Insurance Council of New Zealand (ICNZ).

Four months after announcing the merging of the nation’s fire services into an emergency response group to be called the Fire and Rescue Service, the Government is facing opposition to changes in the funding.

The new service will be funded through a levy on all types of property insurance to meet its expanded role as an emergency response group. The predecessor was funded through a levy on property insurance against fire.

The Government is also broadening the tax base by increasing the base levy on property insurance and doubling the levy on motor vehicle insurance.

ICNZ CEO Chris Ryan is opposed to any form of insurance levy to fund fire services.

“Currently you pay insurance on what you insure your property for, but now you will have an insurance levy on the indemnity value of your property,” he said.

“There will be no exemptions. The amount of levy they want to charge will increase, which discriminates against people who bother to insure. In the first instance there should be no increase in the levy, and secondly it should be taken away.”

Mr Ryan says most submissions to the Government’s review are opposed to the expanded levy.

“I think the Government has been shocked by the extent of opposition from the business sector, insurers and brokers. The whole nature of an insurance levy is not efficient, not fair and encourages underinsurance at a time we want more people to take out insurance.”