Insurance levies in New Zealand will rise almost 40% to fund the new national emergency service from July 1.

Industry bodies have again criticised the rises, but Internal Affairs Minister Peter Dunne says they are needed to help Fire and Emergency New Zealand (FENZ) do its job effectively.

“This new levy rate will allow for improved support to volunteer firefighters, and will help to close the gap in rural communities where fire and emergency services have been underfunded for years,” he said. “It reflects the true cost of delivering high-quality services directly to our urban and rural communities.”

House and contents policyholders will pay an additional $NZ36 ($33) a year and car insurance consumers will pay another $NZ2.37 ($2.17).

The Insurance Brokers Association of New Zealand says the levy increase puts an unfair burden on policyholders, who are essentially subsidising FENZ services for those who choose not to have insurance.

“This imposition of significant costs onto those who take responsibility for protecting their assets will result in a greater degree of underinsurance or noninsurance,” CEO Gary Young said.

“The proposed changes to funding have been promoted as a change to a fairer system.

“It is doubtful those who have to carry the load will think so, given that those who choose not to take responsibility, or can no longer afford it, will still receive the same high-quality service from FENZ.”