NZ Reviews Fire and Emergency Funding Model as Service Demands Change

Minister van Velden said the expanded mandate has created a reasonable debate about whether people paying the levy are carrying a fair share of the costs for services that benefit the wider public.

Fire and Emergency New Zealand's funding system is being reviewed as the government examines whether the current insurance levy remains the best way to pay for the country's growing range of emergency services.

Workplace Relations and Safety Minister Brooke van Velden has asked the Department of Internal Affairs to investigate alternative funding options for Fire and Emergency New Zealand (FENZ), raising questions about whether the existing model still reflects the services the agency now provides.

Insurance Levy Faces Fresh Scrutiny

Around 95% of FENZ's income comes from levies charged on property insurance policies that cover fire risks. The levy was first introduced in 1975 and continues to be the primary source of funding for the organisation. Since then, the role of Fire and Emergency New Zealand has expanded significantly. Under the Fire and Emergency New Zealand Act 2017, the agency took on a broader range of responsibilities that extend well beyond fighting fires.

Minister van Velden said the expanded mandate has created a reasonable debate about whether people paying the levy are carrying a fair share of the costs for services that benefit the wider public. Data recorded between 1 July 2025 and 31 March 2026 shows that only 59% of incidents attended by FENZ, including false alarms, were related to fires. The remaining responses involved other emergencies such as medical callouts, maritime incidents, severe weather events and disaster-related situations.

Growing Responsibilities Raise Funding Questions

The review will explore whether a funding system tied largely to fire insurance remains suitable for an organisation whose daily operations now cover a much wider range of emergencies. Officials will engage with selected stakeholders to identify weaknesses in the current approach and assess possible alternatives. The review will also examine how practical any new funding method would be to introduce and administer.

Van Velden said the government wants to ensure that funding for Fire and Emergency New Zealand remains reliable and capable of meeting future demands as emergency response requirements continue to evolve.

Free-Rider Issue Remains a Concern

One of the challenges highlighted in the review is the issue of people who choose not to insure their properties but still benefit from emergency services when incidents occur. This means some property owners contribute through the levy while others receive the same protection without helping fund the service. The government says the review will help determine whether insurance remains the only practical collection mechanism or if other workable options exist.

The investigation will not affect the new levy rates already set for the three-year period beginning on 1 July 2026. Findings from the work are expected to provide information that could support any future decisions on the regulation and funding of New Zealand's fire and emergency services.