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Industry urges fire levy rethink

06 Nov 2017

The New Zealand insurance industry is lobbying the country’s new Labour Party-led government over controversial plans to change the way the fire service levy is calculated.

New Internal Affairs Minister Tracey Martin, who has responsibility for the levy, is a member of the New Zealand First Party, which has previously spoken out against the changes.

Insurers and brokers believe the levy should be removed from insurance entirely, as has been done across most of Australia, but a recent review by the previous National Party government failed to even consider that possibility.

In fact, the levy was increased by almost 40% to fund a new amalgamated fire service.

Fire and Emergency New Zealand was launched on July 1, bringing together 40 urban and rural fire services at a cost of $NZ303 million ($273.46 million).

Complex changes to the way the levy is calculated are proposed for January 2019, having been delayed from an initial date of July next year.

The new calculation basis attempts to widen the levy net, but has caused confusion because it includes such things as third-party liability covers and travel insurance.

Insurance Brokers Association of New Zealand CEO Gary Young told the proposed new calculation method may need to be delayed still further.

“It is causing us a lot of grief in working out exactly what it means,” he said. “The industry cannot see how it can be put in place by January 2019. It is not practical.

“We would prefer to see the current calculation retained, but at the very least we need to simplify things.

“We would like to think Tracey Martin will take another look at it with fresh eyes.”

Insurance Council of New Zealand CEO Tim Grafton told his group has written to the new minister.

“We have said we would like the levy removed, but if that does not happen then we would seek simple, low-cost compliance,” he said.


 - insuranceNEWS

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