Public consultation on increasing the transitional levy is now underway

Public consultation opened today on Fire and Emergency’s proposal to increase the transitional levy on fire insurance policies. We are seeking this increase to meet a forecast funding shortfall for the 2024/25 and 2025/26 financial years.

A number of factors contribute to this forecast shortfall, including wage increases, increased interest on loans and increased depreciation on fire appliances.

We are focused on ensuring our people can continue to do their jobs effectively and most importantly safely, for the benefit of all New Zealanders. We have been clear with Government that we would not be able to operate effectively, maintain minimum cash reserves and uphold our commitments to our firefighters, were we to make the kinds of reductions in capital expenditure or personnel costs that would be required to address this shortfall.

We have met with union and insurance industry stakeholders to brief them that this levy increase is being considered.

What is the transitional levy?

The transitional levy provides around 97% of Fire and Emergency’s funding and has not increased since we were established in 2017. To provide the required additional funding, we are proposing an increase of 12.8% to the transitional levy component across all levied insurance policies for the 2024/25 and 2025/26 financial years, taking effect from 1 July 2024.

Further adjustments to the levy regime are expected once the Fire and Emergency New Zealand (Levy) Amendment Bill(external link) comes into force. Any increases to the transitional levy would apply until the new Part 3 levy comes into effect. A public consultation on Part 3 levy rates is expected later in the year.

For more information on the Fire and Emergency Levy, check out How Fire and Emergency is funded here on The Portal.

How to make a submission

We welcome written submissions from insurance policy holders, their representatives and interested members of the public. Information on this consultation and how to submit a response can be found on our website at www.fireandemergency.nz/about-us/public-consultation(external link).

The consultation closes on Tuesday 2 May 2023.