New Zealand’s Internal Affairs Department has called for submissions on whether the controversial insurance-based levy to fund fire and emergency services should be replaced by an alternative arrangement.

Fire and Emergency New Zealand (FENZ) was formed in 2017 but decisions over how it should be funded are being reviewed amid concerns over flaws in the insurance-based model. Transitional arrangements are in place until 2024.

“We are taking a fresh look at the options and talking to a wide range of people and organisations to ensure we understand both the benefits and challenges in any potential funding model,” Internal Affairs Minister Tracey Martin says in a discussion paper.

In the case of buildings, options could include improving the existing insurance-based levy approach or moving to an alternative model such as a property-based levy

For motor vehicles, alternatives under consideration include a licensing-based charge or funding through land transport revenue, collected through taxes on petrol and other road user fees.

Critics of insurance-based levies say they increase the cost of policies and stop some people from taking out cover, while property owners who don’t insure still benefit from access to the emergency services, effectively giving them a free ride.

The discussion paper highlights a shift in Australia away from insurance-based levies in Queensland, SA, WA and Victoria.

“Internationally, there is a growing trend to move away from insurance-based funding models,” it says.

The department will hold information sessions across New Zealand, starting on Wednesday next week in Hamilton and ending up on December 5 in Dunedin. It has called for submissions by February 5 next year.

More information is available here.