The Insurance Council of New Zealand (ICNZ) has expressed its support for the government's review of the funding model for Fire and Emergency New Zealand (FENZ). It says the review presents an opportunity to create a more sustainable and equitable approach to financing the country's emergency services.
ICNZ Chief Executive Kris Faafoi said the review comes at an important time as policymakers consider the long-term viability of the current system.
"Fire and Emergency New Zealand provides an essential service to communities across the country, and it is important it is funded in a way that is sustainable, fair and fit for the future," Mr Faafoi said.
"The current model relies on a levy applied to insurance premiums. While this has been in place for many years, insurers have long questioned whether it remains the most appropriate way to fund such a core public service."
Mr Faafoi warned that continued reliance on insurance levies could place additional pressure on premiums and reduce affordability.
"When premiums rise, there is a real risk people reduce their cover or go without it altogether. That has broader consequences for individuals, communities and the wider economy," he said.
The review follows concerns raised by New Zealand's Minister of Internal Affairs, Brooke van Velden, over the fairness of the existing funding model, noting that fire and emergency services are used by all New Zealanders, regardless of whether they hold insurance.
"Ensuring FENZ has a stable and sustainable funding base is essential. At the same time, linking that funding directly to insurance raises longer-term challenges," Mr Faafoi said.
He added that the review should be considered alongside broader efforts to strengthen resilience against natural hazards.
"Our proposed Community Protection Levy is a practical option to help fund large-scale risk reduction, supporting communities to better withstand natural hazards and help keep insurance affordable and accessible over the long term," Mr Faafoi said.
As part of the review process, ICNZ expects officials to examine funding approaches adopted in comparable jurisdictions, many of which finance fire and emergency services through central or local government.