Funding fire and emergency services
On 1 July last year, fire and emergency services in New Zealand were amalgamated into one entity, Fire and Emergency Services NZ (FENZ). The amalgamation was accompanied by a remarkable 40% increase in average levies. In a recent report for the Property Council, TDB reviewed the funding regime proposed for FENZ and examined best-practice funding models from other countries. We found that the funding regime for FENZ falls well short of the principles in FENZ’s founding legislation and well short of international best practice. Indeed, New Zealand appears to be an outlier amongst OECD countries in basing funding on the value of insured property, with most countries using rates-based funding mechanisms. We found that the regime proposed by the government for FENZ was inconsistent with the funding principles in the legislation. It results in levy payers facing charges that bear little or no relationship to the likely costs they impose on FENZ; provides little incentive for FENZ to control its cost; and provides little incentive for property owners to take precautionary measures and thus help prevent fires and save lives.