Government Confirms New Fire and Emergency Levy Regulations with Adjusted Rate

Revised Levy Rate Balances Cost of Living Concerns and Emergency Services Funding.

The Government has approved the final regulations for a revised Fire and Emergency New Zealand (FENZ) levy on insurance contracts, which will take effect from July 2026, Internal Affairs Minister Brooke van Velden announced.

The new levy rate includes a 2.2 percent increase, significantly lower than the original 5.2 percent proposal consulted on earlier this year. Minister van Velden emphasized the importance of balancing affordability for New Zealanders with ensuring FENZ is adequately funded. Key Details on the Levy

What the Levy Covers: The levy will be applied to most insurance contracts covering property, including homes, contents, vehicles, and non-residential properties.

Implementation Timeline: Regulations have been finalized 18 months in advance to give insurers time to prepare for the changes.

Focus on Cost Efficiency: FENZ is tasked with delivering $60 million in savings during the three-year levy period to create a reserve for unexpected expenses or shortfalls in levy collection.

Rationale Behind the Adjusted Rate

“When reviewing the proposal, the cost of living for New Zealanders was a key concern. I asked Fire and Emergency to explore an alternative to their initial 5.2 percent increase, which led to this more modest 2.2 percent adjustment,” said Minister van Velden.

“This decision ensures that Fire and Emergency remains well-resourced to provide its essential services while reducing the financial burden on households and businesses.”

Additional Measures to Ensure Fiscal Responsibility

To safeguard the financial sustainability of FENZ, the Government has introduced new measures:

1. Savings Target: FENZ must achieve $60 million in cost reductions over the levy period, improving its operational efficiency.
2. Emergency Reserves: The savings will serve as a financial buffer for unforeseen events or under-collection issues.
3. Long-Term Planning: The advance timeline for implementation ensures smooth integration for insurers, minimizing disruptions for policyholders.

Public and Industry Feedback

The insurance industry welcomed the clarity provided by the finalized regulations. Insurers had requested early confirmation of the rules to allow sufficient preparation time.

Fire and Emergency New Zealand thanked stakeholders for their input during public consultations, noting that the revised levy strikes a balance between operational funding and affordability.

Next Steps

As the levy’s implementation date approaches, FENZ will continue engaging with insurers and the public to ensure a seamless transition. Regular updates on cost-saving measures and operational improvements are expected as part of the Government’s commitment to transparency and accountability.

“Fire and Emergency plays a crucial role in keeping New Zealanders safe, and these new regulations provide the funding certainty they need to continue their vital work,” Minister van Velden concluded.