The New Zealand Institute of Economic Research (NZIER) says the country should introduce property-based charges to fund its fire service, labelling the current levy on insurance “unfair, outdated and out of step with the rest of the world”.

The report was commissioned by the Insurance Council of New Zealand (ICNZ).

The council’s CEO Tim Grafton says it is unreasonable for everyone – including the uninsured and underinsured – to benefit from the charge on insurance premiums.

“No one would expect the police force to be funded through their insurance premiums,” he said.

He told insuranceNEWS.com.au the funding issue “has been kicking around for 20 years”.

Since the introduction of the fire services levy (FSL) as a “temporary fix” in 1993, there have been 12 reports, with most recommending the levy be replaced.

Mr Grafton says whoever wins New Zealand’s general election on September 20 will receive “strong representations” from ICNZ.

“The weight of evidence and logic will be for change,” he said. “The critical issue is going to be political will, because there would be some resistance to a fire service levy based on taxation funding or property rates.”

The opposition Labour Party has signalled its support for replacing the FSL with a property charge and the ruling National Party says it is open to change.

The NZIER says funding the fire service entirely from general taxation is the “best option”, but if this is unacceptable a mixed model that includes public funding and levies on property rates and motor vehicle registration is possible.

Every Australian state except NSW has shifted from insurance-based levies to property-based charges to fund fire and emergency services. The ACT and NT fund theirs from consolidated revenue.