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NZ fire levy reform delayed by COVID focus

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Fire and Emergency New Zealand (FENZ) funding reform progress will be delayed until after this year’s general election due to the Government’s focus on the COVID-19 pandemic.

Department of Internal Affairs GM Policy Raj Krishnan says the Government’s response to COVID-19 came shortly after public consultation concluded on the FENZ review paper earlier this year, causing progress on phase two to be placed on pause.

“The department will now seek a Government decision on how Fire and Emergency should be funded after the election,” he told insuranceNEWS.com.au.

“Once this decision is taken, there will be further consultation with stakeholders on the details of the proposed funding regime.”

A recently released summary of submissions shows pressure has increased for FENZ to be at least partly funded through taxation, rather than through a levy on insurance premiums that allows “free-riding”.

“Of those that commented on this there was a range a range of positions, from stating that Fire and Emergency should be wholly funded through general taxation, through to an increase to the Crown contribution,” Mr Krishnan said.

The consultation paper released last year said funding mainly through taxation was outside the scope of the review, but many responses protested that it should be considered.

The Insurance Council of New Zealand (ICNZ) says full taxpayer funding is the best option, but it would support a mixed model that includes direct levies paid on property and through motor vehicle licensing.

“We have never considered that funding FENZ through a levy on insurance is appropriate and we’re pleased with the overwhelming support from the submissions for future funding to be supported by general taxation,” ICNZ CEO Tim Grafton said.

FENZ was formed in 2017 through the amalgamation of rural and urban authorities, while funding continued to be provided by an insurance-based levy under transitional arrangements.

Legislation was passed last year to extend the transitional levy provisions to July 2024, while allowing the date to be brought forward as needed to implement a new regime.

The New Zealand general election will be held on September 19.