Fire and Emergency New Zealand responds when any of us needs it, insured or not, self-insured or not, public or private. The funding model behind it does not reflect that reality.
Right now, the cost of a genuinely essential national service falls disproportionately on those who hold residential and commercial insurance, while uninsured and self-insured property owners benefit from exactly the same service without contributing to it at all.
Property Council is calling for a comprehensive redesign of the FENZ funding model, so that every sector that relies on the service contributes fairly and proportionately to the cost of delivering it.
A model that no longer matches how the service is used
FENZ is funded primarily through a levy on insurance premiums, which made sense when the service was overwhelmingly about responding to insured fire risk. It no longer reflects how the service actually operates today. A significant proportion of FENZ’s work now relates to incidents well beyond insured fire risk, yet the funding model has not kept pace with that shift in cost drivers and risk profile.
The practical effect is cross-subsidisation. Those who insure their property, and pay their premiums in full, are effectively covering the cost of a service used by everyone, including uninsured and self-insured property owners who pay nothing towards it. Recent reviews have made some adjustments, but the underlying structural issues remain unresolved.
What a fairer model looks like
Property Council supports a funding model built around a simple principle: those who benefit from the service should contribute to its cost, in proportion to that benefit. In practice, that means:
- raising the residential insurance cap, so higher-value residential properties contribute a fairer share relative to the level of cover and risk involved.
- ensuring publicly owned assets contribute appropriately, rather than sitting outside the funding base while still relying on the service.
- increasing the Crown’s own contribution, recognising that FENZ delivers a genuine public good that extends well beyond insured fire risk.
- improving data collection and introducing mandatory reporting, so that funding decisions are backed by a clear, transparent picture of who is actually using the service and why.
Why this matters beyond fairness
A fairer funding model is not just a matter of principle, it is a matter of sustainability. A system that continues to rely on a shrinking, unevenly distributed base of insured contributors is not one that can keep pace with the cost of delivering a critical national service over time.
Get the settings right, and the benefits extend well beyond who pays what:
- a sustainable funding model for a service every New Zealander depends on.
- a fairer allocation of costs across all users, not just those who happen to hold insurance.
- stronger incentives for risk reduction and investment in fire safety, because a funding model that properly reflects risk also rewards those who actively manage it.
Our recommendation
Property Council is recommending that government redesign the Fire and Emergency New Zealand funding model to ensure all sectors contribute fairly to the cost of delivery.
Chief executive Leonie Freeman says the case for change is about fairness as much as sustainability.
“Fire and Emergency New Zealand is a service every New Zealander relies on, but the funding model behind it hasn’t kept pace with how the service is actually used. It isn’t fair that insured property owners are effectively subsidising a service that uninsured and self-insured owners use just as much. Raising the residential insurance cap, lifting the Crown’s contribution, and making sure publicly owned assets pay their share would put this funding model on a genuinely sustainable footing.”
Property Council will continue to advocate for a funding model that spreads the cost of this essential service fairly across everyone who relies on it, as part of our broader push for fairer regulation and tax settings across the property sector.