New Zealand's insurance sector is calling on all political parties to replace the current Fire and Emergency New Zealand (FENZ) levy with a simpler Community Protection Levy, redirecting funding into reducing natural hazard risk before disasters strike while moving FENZ to sustainable Crown funding.
“New Zealand needs to invest more in reducing risk before disasters happen,” Insurance Council of New Zealand (ICNZ) Chief Executive Kris Faafoi said. “A Community Protection Levy would provide a simple, durable way to fund resilience, while ensuring FENZ has the secure Crown funding it deserves."
Mr Faafoi also said, “FENZ plays a vital role in protecting communities and responding when disasters strike. But the current levy is too complex, too uneven, and no longer well suited to the risks New Zealand faces today.”
Under the proposal, FENZ funding would move from insurance-linked levies to Crown funding, allowing around NZ$600m ($354.3m) to NZ$700m a year to be redirected into resilience and risk reduction.
The Community Protection Levy would be collected by insurers on behalf of the Government, ensuring a simple and efficient system for households and businesses. This would replace the existing levy system, which currently applies different charges across homes, contents, commercial property and vehicles, making it more complicated than necessary and less suited to today’s risk environment.
“A Community Protection Levy would give New Zealanders a direct stake in reducing the risks they face,” he said.
“ICNZ research shows 87% of respondents support acting early to protect communities from natural disasters. This levy would turn that support into funded, long-term projects that make a real difference.”