Insurance Council Condemns Increase of Fire Levy

The Insurance Council today has condemned a move to increase the Fire Service levy to pay for the Fire Service.

Insurers say it is a discriminatory tax on all New Zealanders who care to take out insurance. Insured people will be incurring a new tax while those people who do not take out insurance will pay nothing for the full protection of the Fire Service.

Insurance Council Chief Executive, Christopher Ryan said this was inequitable and inefficient and an appalling way to treat those New Zealanders who insure their homes. Those people who do not insure do not have to pay the levy; those people who do insure are required to subsidise those people who are not insured.

The problem lies with the funding mechanism of the Fire Service.

The Insurance Council believes that the current system of funding the Fire Service is inefficient and inequitable. The Insurance Council has proposed an entirely new funding system for the Fire Service which will produce benefits for all and address the issue of avoidance and evasion of paying the levy.

“The problem of levy evasion and avoidance is a long standing issue, and one which the Insurance Council identified some years ago. The only solution to getting everyone to pay for the Fire Service is to introduce a property-based charge.”

Property-based funding would:
 Lower the cost for all homeowners currently insured
 Reduce the opportunity for corporate and domestic avoidance of the levy
 Achieve greater accountability between the Fire Service and it’s customers
 Achieve greater transparency of charging
 Lower the cost to those in rural areas to reflect the level of service they receive
 Maintain the current budget of the New Zealand Fire Service
 Charge people and businesses according to the fire risk they represent
 Provide an incentive to invest in fire prevention, such as sprinkler systems.

“The Government has the Coopers and Lybrand Report which models a property-based funding system. The question should be asked of Government why it is not acting on the report and making progress on this issue.”

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