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Rural Communities Hit Hardest By Unfair Fire Tax

30 March 2001

RURAL COMMUNITIES HIT HARDEST BY UNFAIR FIRE TAX

Farmers have more reason than most to support Government plans get rid of Fire Tax and introduce an alternative funding mechanism for the Fire Service, according Farmers' Mutual Group - Group Marketing Manager Grant Uridge.

The Government has confirmed it is considering three new options for funding the Fire Service, which were proposed by the Insurance Council earlier this week.

The three options include using direct taxes like those levied for other emergency services such as the police, including a Fire Service component in local government rates or augmenting a charge on vehicle registration to pay for Fire Service attendance at road crashes.

"Currently the Fire Service is funded by a tax on people who are insured and these taxes are collected by insurance agencies such as Farmers' Mutual Group at no charge. The Insurance Council believes this system is failing because as many as twenty per cent of New Zealanders are not insured and so do not pay the tax. However, those who are not insured still benefit from the use of the Fire Service in the event of a fire and this is obviously unfair," Mr Uridge said.

New Zealand farmers have more reason than most to support the introduction of a new system, such as the fairer option of including an Fire Service component in local government rates, Mr Uridge said.

"We've known for a long time that rural communities have had the worst access to fire services of any community in the country. If you live in a city and have a fire, it might take only a few minutes for the Fire Service to come to your aid. But if you live on a farm, your access to emergency services is likely to be far more limited and the majority of your support will come from the voluntary fire brigade anyway.

"This means that farmers who pay their Fire Tax are not only covering the costs of New Zealanders up and down the country who aren't paying up, but they're not even getting fair access to the resources of Fire Service which they are funding.

"Despite a recent increase in the Fire Service levy, the Fire Service says it is currently more than $45 million dollars in debt with debt levels projected to rise to $55 million by the end of this year.

"Given the service's current debt, it also looks likely that the Fire Service levy will be raised by a further eight million dollars in the near future to cover the costs of a newly proposed pay deal for professional fire fighters.

"An increase in the levy will simply increase the inequity in the payment of Fire Taxes even further”, Mr Uridge said.

"Minister of Internal Affairs George Hawkins has said he hopes to introduce new legislation into the house this year and that he might come up with a completely new basis for funding the Fire Service by 2002.

"As a leading provider of financial services to rural communities nationwide, Farmers' Mutual supports the option of including a Fire Service component in local government rates, and in the interests of fairness, urges Mr Hawkins to review the current funding mechanisms for the Fire Service as soon as possible.

"Addressing the inequities faced by the rural communities in their access to emergency services should be a major priority for the Minister," Mr Uridge said.

ENDS

For further information, please contact:

Grant Uridge
General Manager, Marketing Telephone: 06 351 882


Farmers' Mutual Group

Farmers' Mutual Group is New Zealand's leading rural financial services organisation. Established in 1905 as a rural insurer, it has grown into a financial services group adding finance and investment to its portfolio of services but has remained focused on serving the needs of rural communities.

Issued by Weber Shandwick Worldwide on behalf of Farmers' Mutual Group


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