A massive increase in taxation could be on the cards for insured New Zealanders, says the Insurance Council.

The Insurance Council was commenting on indications that fire fighters could cost the Fire Service an extra $25 million a year as a result of their current pay claim.

Insurance Council chief executive Chris Ryan said the direct result of a pay claim of this size would be a massive increase in the tax that applies only to insured New Zealanders.

The Fire Service is funded by the fire service levy which is a government tax that is only collected from insured people.

The Insurance Council says those persons who are not insured will not be subject to the additional tax. The additional tax will fall solely on those New Zealanders who care enough about their properties to insure them.

Insurance companies are required by law to collect this tax on behalf of the government and have long advocated that if taxes for the Fire Service are to increase, then the levy should apply to all New Zealanders. Insurance premiums will not rise as a result of an increase in the Fire Service levy. The only increase will be to the amount of the Fire Service levy which is a tax imposed by the Government.

Insurance companies have no interest in avoiding the levy payments being made because they go toward protecting the New Zealand public and property. Reduced efficiency in the Fire Service means reduced protection.

Chris Ryan said that the dispute in the Fire Service has been deeply damaging to the efficiency of the Fire Service. The dispute has gone on despite three changes in the top position within the Fire Service, the only constant being the intransigent nature of the fire fighters position.

ENDS

© Scoop Media