Fire and Emergency New Zealand (Levy) Amendment Bill

Well, what a double delight this is! I’m back again five minutes later and now we are talking about the Fire and Emergency New Zealand (Levy) Amendment Bill, second reading.

So it has been to the select committee. We supported it with some reservations—which I’ll touch on shortly—to the select committee. As I’m sure previous contributors to this bill will have attested: 19 submissions and seven in favour, two did not support, and eight did not specify, which is interesting in itself, actually, to have a submission which doesn’t say whether you support or not. However, I’m sure they had their reasons.

Anyway, the key changes to the bill that were agreed by the committee was a tweak to the definition of a contract of fire insurance in clause 6(3) amending the definition of “sum insured”. Levy exemptions: there were a range of submitters talking about the levy arrangements for museums and galleries—maybe they were part of the uncommitted seven submitters—but they certainly were keen that museums and galleries retained their exemptions, which the committee agreed was a good and solid policy position. So that has been recommended. And then there was a technical change to how the levy applies to motor vehicles—more just sort of wrapping up potential confusion.

So we support this. It still is, though, from our perspective, a lost opportunity. There has been debate on both sides of the House over the years over how best to fund Fire and Emergency New Zealand (FENZ). I’ve been previously the spokesperson in this space. It struck the National Party that, really, when you look at the income stream of this organisation and the fact that it doesn’t have to compete with other departments, with Treasury, for Treasury largesse—it, essentially, just takes it off motor vehicle owners and particularly commercial property owners. And when you see the scale of the income over the last five years—reaching $460 million, which is over $200 million more than what was expected by this time in its development when it came together in 2017—there was an argument, I think, of actually looking at FENZ quite fiscally muscularly, if you like, to check whether they were being efficient with their spend, to see if there are other ways to fund them, as opposed to just tweaking the current model which has been in place for quite some time, which does have elements of free riders, does have a disproportionate impact on commercial property owners.

Rather than taking that opportunity, the Government, we think, went for the easy option of, essentially, rolling over the model that’s been there for quite some time and just tweaking at the margins. Frankly, there isn’t enough focus, from a National Party perspective, on the financial performance of FENZ. It doesn’t have that rigour, in our view, that other departments arguably have in terms of Government oversight. They have a board—quite a political board. In fact, some of the board members are able to reflect on whether they think the Opposition are progressing well or not and still stay in their jobs. So it’s quite clearly a political board, with perhaps more of a focus on playing political games as opposed to driving the organisation in a way that would stand at the level that would be expected in other Crown agencies.

However, what has been put forward doesn’t cross the threshold of us opposing, but we do believe that whilst the changes can at one level be justified, it is a huge opportunity missed to actually restructure FENZ, get them more focused on delivering a better outcome for the money they receive and actually getting greater equity in terms of the funding model over time. Thank you very much.

Tēnā koe, Madam Speaker. It’s a pleasure to speak on this bill, the Fire and Emergency New Zealand (Levy) Amendment Bill (FENZ) tonight, because it is about services and providing those services that are so important to our communities. It makes sure those services are adequately funded. Can I speak in thanks to the fire and emergency services that have worked so hard through the cyclone recovery, through the Auckland floods, and in our communities every day. You know, I think back to the Papatoetoe tornado in my electorate—and in your electorate, Madam Speaker—where the fire and emergency services were there around the clock supporting our communities, and so they deserve our support tonight.

The bill seeks to make the new fire and emergency levy regime simple to implement while adhering to the funding principles in the existing FENZ Act, and the bill gives effect to Cabinet’s decision to charge the levy on contracts of insurance for fire damage and calculate the levy on the sum insured in the contracts for fire damage. These changes, which the Governance and Administration Committee has considered carefully, make the kind of change which is proportionate. The bill that was passed in 2017, while that was mostly fit for purpose, did have some difficulties come to light about how easy it would be to interpret and implement within that framework. That is why the bill is needed. It makes these important changes which we need going forward to support these services, and that’s why I commend it to the House.

Mālō e lelei, Madam Speaker. It’s a pleasure and an honour to take a quick call on the Fire and Emergency New Zealand (Levy) Amendment Bill tonight. But can I first start by acknowledging the passing of the two brave volunteer firefighters, heroes, and my thoughts and prayers go out to their loved ones as well. Actually, to all the emergency and first responders who selflessly go out there all the time, keeping us safe—really grateful to you all.

And speaking to firefighters and to the bill, my brother is a firefighter, and he was deployed to Napier, and he worked alongside many volunteers, many other first responders, firefighters, and while he noted the absolute devastation, he also commented on how beautiful it was that communities came together, worked together for the sake of everyone else around them—including people from outside. And I just want to mention that he mentioned the Ōtaki Surf Lifesavers who came up for two days, he reckoned they “slogged their guts out”—his words, not mine—alongside many others. So, again, just wanted to mihi to them all.

But, specifically, like my colleague Arena said, this bill is quite a simple change—it helps to make sure that the regime is simple to administrate or implement. It will reduce the extra costs and disruption to the system. It’s simple, it’s a no-brainer, it’s a good piece of legislation. I commend this bill to the House.

Thank you, Madam Speaker. It’s a pleasure to take a call on the Fire and Emergency New Zealand (Levy) Amendment Bill. It doesn’t amend very much, but none the less, it’s before the House tonight. Having said it doesn’t amend very much, of course, I’ve got to say what a great job the select committee did of shepherding this through to this stage, and with a number of very good submissions and quite a lot of discussion on some issues.

My colleague Todd Muller touched on some issues which I want to touch on, but before I do that, I do want to acknowledge Fire and Emergency New Zealand. We had them before the select committee today and had let them off their scheduled appearance a couple of weeks for very good reason. And whilst some of their performance in the past has left us grappling with, I guess, the way they’ve operated, at the select committee level they did come back today and their chair did give us a very good outline of the remediation activities they’re undertaking at what’s a very testing time for Fire and Emergency New Zealand, because, as previous speakers have referred to, they have been quite busy.

And, of course, the very definition of what they do is challenged at all times, and being challenged right now, and so whilst I’ll get back to the bill in a minute, the challenges that they’ve had in the past—well, certainly the past month, and before that—have been significant. I think they’ve done a pretty good job in very difficult circumstances of getting to where they’ve got to.

Back to the bill, and there were a number of issues that concerned us and concerned submitters, and I think it’s a typical example of where we get regulation being imposed as the result of the legislation we’ve passed, and I’ve talked about this a number of times in the House before. It’s very frustrating for select committees to pass a piece of legislation and then later find the regulations we anticipated might be put in place are quite different.

This time I’m particularly referring to the museum sector, who were very strong in their submissions and the worry they had about what might happen to their levies because of the fluctuating nature of their business and the fact that some of the exhibitions they wish to put on for the good of all New Zealanders are very expensive to put on, have very high value, and consequently could attract extremely high levies in this situation. They were very uncomfortable with the fact that this was being left to regulation, and we can only trust that the department, when they get to draw up these regulations, are very cognisant of the select committee’s report and the concern we had with respect to that issue.

I want to touch on—because it’s very relevant, again, with the events of the last three weeks—the way these levies are imposed. It’ll be very interesting, when we get to the end—or, I guess, assessment—of Cyclone Gabrielle and the recent extraordinary rain events we’ve had in New Zealand. It’ll be very interesting when we get the facts and figures on the number of people who carry insurance, because this bill, the essence of it is that it uses insurance premiums or the acquisition of insurance to impose these levies. So people who aren’t insuring are not being levied, and consequently getting a free ride on those who are being insured. I know if you go back to 2004, in the Manawatū floods, there were a significant number of people—probably some 11 or 12 percent of all damaged properties not insured.

We find the same now: the fact that we’ve got 11 to 12 percent of New Zealand property owners getting a free ride on the back of the fire and emergency levy system. That’s why, I think, I’ve always favoured a different system of imposing these levies. Obviously, a property-based or rate-based system would be much more appropriate to deal with this because it would capture everybody.

So it’s going to be really interesting to see what does happen in the next few months as this whole disaster unfolds and the number of people who don’t carry insurance is better understood. I’m sure this bill will come back to the House in due course for that very reason.

Todd Muller referred to the extraordinary amount of money being collected by Fire and Emergency New Zealand as a result of the changes made in the 2018 review, I think it was—sorry, the 2016 review, the previous review—and putting in place of Fire and Emergency New Zealand by the National Government, interestingly, and I very well remember discussions at the time, both around the way in which the levy was calculated and about the amount of money they would collect and the accountability as a result of that.

I guess this morning’s hearing in the select committee, whilst it was the appropriate place to be dealing with those issues, the environment we were currently in and the environment Fire and Emergency New Zealand are currently operating in, was probably not appropriate to get too hard into those issues. There are some other issues that they have significant challenges with, though, and one of them’s their culture. That was also addressed by the chairman this morning.

💬 Andrew Bayly: What about the deputy chair?

Mr Muller’s talked about the deputy chair, and the deputy chair did feature on the news for about five minutes tonight—but that’s quite beside the point. The issue, I think, is that the culture of the organisation has certainly been under pressure. There’s been two reports done on it, and the chief executive—and the chair—did talk at length about that this morning, so I think we can be satisfied they’re going OK.

So back to the bill, and I think the essence of this bill: it’s sound given that I don’t agree with the way we’re levying them, but none the less the National Party certainly will support this bill, because I think the things it does—and the things it resolves—are positive for Fire and Emergency New Zealand. I’m sure this House will take a significant amount of interest in the progress Fire and Emergency make in the next year or so as they try to get their house in order—this bill will certainly help them do that.

They did also mention this morning that they’ve got significant challenges around what they, I guess, thought they’d inherited as a result of the Act that merged all of the Fire and Emergency New Zealand volunteer fire brigades, rural fire, and the professional fire brigades, or fire stations. They were all merged together, and I think it’s fair to say they found some significant financial challenges as a result of that merger, and so this levy situation will help them with that as well.

So I think that’s all I’ve got to say on the bill, other than to thank those officials that gave us significant assistance with the bill and to thank the very good select committee for the very good work they did on getting it to this point, and I look forward to the committee stage.

Kia ora, Madam Speaker. It’s echoed around the House, as this bill, the Fire and Emergency New Zealand (Levy) Amendment Bill, has been debated, and as a speaker, again, I just want to thank Fire and Emergency New Zealand for what they do. I know in my region and in my electorate of New Plymouth—in fact, on Monday, I was just meeting with the head of Fire and Emergency New Zealand (FENZ), checking in, and just to know that we have a strong and robust not only professional but also volunteer FENZ service. Again, as is being said around this House on this piece of legislation, just to say thank you to those who put their lives on the line and give up their time for the sake of the protection of our communities. Of course, we acknowledge the tragedy in Muriwai and the two FENZ volunteers who lost their lives.

This piece of legislation has obviously progressed and has been in the Governance and Administration Committee. The other part I want to say is—to acknowledge, obviously, the new Minister that has this legislation now, the Hon Barbara Edmonds, who now is carrying this piece of legislation. I know that she has been really engaged and connected with the FENZ community in terms of supporting what’s going on. On that, I commend this bill to the House.

Motion agreed to.

Bill read a second time.