The New Zealand government has agreed to the rates for the redesigned levy that will fund Fire and Emergency New Zealand (FENZ) from July 2026, said Minister of Internal Affairs, Ms Brooke van Velden. The rate of levy increase is revised to 2.2%, lower than earlier envisaged.
“Earlier this year FENZ consulted publicly on a 5.2% increase to the levy. I was not convinced that such an increase is justified and requested a solution from FENZ which would ensure continuity of services, while managing levy revenue responsibly,” said Ms van Velden in a statement.
She added, “FENZ consulted on a flat NZ$40.12 ($25.03) charge to vehicle insurance, following Cabinet consideration this will now be NZ$25. While acknowledging increasing costs is difficult for Kiwi motorists, fairly apportioning costs to the rate of incidence was a message that came through strongly from the public during consultation. This change from NZ$9.53 to NZ$25 for full cover insurance means the rate will now go someway to better reflect the number of motor vehicle incidents and the overall cost to FENZ’s response.”
“The cost of living for New Zealanders was a significant consideration for me when agreeing to the rates of levy. It is important that Kiwis are not paying more than necessary to ensure FENZ is resourced to maintain high standards of frontline services.”
“While FENZ must be funded appropriately to continue delivering its services, I have asked FENZ to deliver savings of NZ$60m by the end of the three-year levy period. These savings will provide a reserve for significant unexpected costs or under-collection of the levy.”
The new levy will replace the existing transitional levy from July 2026.
The FENZ levy is included in any insurance contract that covers property for loss or damage from fire, including cars, houses, and contents, and non-residential property.
ICNZ's reaction
In response to the changes, Mr Kris Faafoi, chief executive of the Insurance Council of New Zealand, said, "We welcome the Minister’s decision to set levy increases at a lower rate after asking FENZ to have another look at the proposed levy increases.
"We know that New Zealanders are finding it tough dealing with the cost-of-living crisis and we support the government’s move to ensure Kiwis don’t pay anything more than they have to."
He added, "We have previously expressed our concern about the ongoing sustainability of FENZ funding as it is only funded by those who purchase insurance. If fewer New Zealanders take out insurance, then FENZ funding will reduce, requiring levies on insurance to increase further and making insurance even less affordable.
"The insurance Industry will be working with both the Department of Internal Affairs and FENZ over the coming months to work through some of the details of the levy applications to insured property.
"We want to ensure the changes can be implemented easily in the time frames set down by the government and in a cost-effective way that doesn’t add to the regulatory burden which will ultimately be borne by New Zealanders," Mr Faafoi said.