Fire and Emergency wants annual home levy to rise $40 to cover operating costs

The government has received the options for easing off on the rate at which the fire levy on insurance premiums rises.

The levy rose by almost 13 percent on 1 July, its first rise since Fire and Emergency NZ was set up in 2017.

FENZ is looking at wanting over $700m from the levy, almost twice what it was funded for back then.

Internal Affairs Minister Brooke van Velden sought options for lower rates of levy rise than those FENZ initially consulted on.

FENZ’s four options were for rises of between 0 percent and 7 percent through to 2029.

Its preference was for a levy of almost $150 a year on any home worth over $600,000, an increase of about $40 from now.

“Fire and Emergency must have the resources necessary to deliver its critical role in our communities while also operating as efficiently as possible for levy payers,” van Velden said on Friday.

Earlier in the year, she had questioned the rate at which FENZ’s spending had increased.

The 12.8 percent rise just imposed was agreed by the previous government and included funds to support a pay agreement with fulltime firefighters.

FENZ said it wanted the levy to rise by 5.2 percent in the years ahead, arguing it needed the extra to pay for things like new, long-ladder fire trucks, as its old ones had been breaking down regularly.

This “allows progression of the capital programme to replace and refurbish high priority asset and appliance needs”, it said in a cost recovery impact statement.

A consultation document showed the levy would vary in its proposed application. There would be an increased levy on cars, of $40.12 flat, and a slightly lower levy on non-residential property.

The lower option of zero levy rise would slash its cash reserves to zero in 2026-27, it said.

FENZ has a policy of having $50m in reserve, with $15m of that in case of a big bush fire that goes on for several days.

It “would need to make significant savings, to avoid insolvency, with likely impacts on response times and performance targets” if the levy did not rise, FENZ said.

The next option up, a 3.6 percent rise, would take cash reserves to zero by 2029-30.

FENZ “would need to seek additional funding from government following a long duration response to ensure organisation remains solvent”.

As for the highest-rise option, 7 percent, this would allow all vehicles to be replaced in time – as well as issues with fire trucks, Urban Search and Rescue has lacked enough utes – and to sort out earthquake work at more fire stations, it said.