New Zealand’s insurance industry is preparing for operational and financial adjustments as Fire and Emergency New Zealand (FENZ) embarks on a significant cost-saving initiative and the government finalises a moderated levy increase.
The FENZ levy, collected through insurance policies on property, vehicles, and contents, remains a central funding source for the agency, directly influencing both insurers and policyholders.
In a move welcomed by the insurance industry, the government has confirmed that the FENZ levy increase, set for July 2026, will be limited to 2.2%, a reduction from the previously proposed 5.2%. Internal Affairs Minister Brooke van Velden said the decision was made to ensure funding needs are met without placing undue pressure on New Zealanders. The government has also instructed FENZ to identify $60 million in savings over the next three years to build a financial buffer.
FENZ has outlined a plan to reduce its annual spending by $50 million, citing ongoing financial pressures and a rise in non-traditional emergency callouts. The agency has indicated that while frontline firefighter and communications centre positions will be protected, other roles may be affected as part of a broader organisational review.
According to RNZ’s report, FENZ chief executive Kerry Gregory told staff: “We can’t keep doing everything for everybody, and that’s not a bad thing.” Gregory further explained the need for a focused approach. “Our people are carrying a heavy workload, and our new strategic direction allows us to focus our energy and resources on what matters most,” he said.
The proposed changes will not affect FENZ’s core statutory duties, including firefighting and emergency rescue, as outlined in the Fire and Emergency New Zealand Act 2017. However, the Professional Firefighters’ Union has voiced concerns that up to 230 roles could be impacted, particularly regarding the recruitment of additional firefighters previously agreed upon.
The restructuring plan includes consolidating FENZ’s regional management from five regions to three, with a final decision expected after staff consultation. The agency has committed to maintaining transparency with frontline staff about operational priorities, but some personnel have expressed uncertainty about the future scope of services, especially in response to severe weather events.
Recent operational decisions, such as the discontinuation of motorised watercraft rescues, have also prompted discussion within the sector. FENZ has clarified that this move is unrelated to cost-saving efforts and is instead based on safety and capability considerations.
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Gregory has emphasised the importance of ongoing investment in staff, facilities, and equipment, including the replacement of aging fire trucks. Deputy Prime Minister David Seymour recently commented: “What is clear is that there does need to be a lot of upgrades and at the same time, it’s only in the last two years that FENZ has had an asset maintenance plan.”
