Fire levy collection set to change hands

By KEVIN TAYLOR

A plan to ditch the Fire Service levy has delighted the Insurance Council.

But the move, reportedly being planned by the Government, will probably not cut bills for households or businesses at present paying insurance.

Although those with insurance will save from the levy's demise, the Government may instead fund the Fire Service through a property tax collected with council rates.

Insurance Council chief executive Chris Ryan said a property levy was fairer and captured every property owner.

The council estimates 20 per cent of people avoid the Fire Service levy by either not being insured or, usually in the case of businesses, sourcing insurance overseas.

Mr Ryan said that in the last three or four years there had been an increasing trend, particularly by businesses, to get their insurance overseas or through different schemes that sidestepped the levy.

He said the council wanted to encourage insurance business in New Zealand.

Council figures show that between 1996 and 2000 commercial premiums collected had fallen from $276 million to $238 million. At the same time total premiums for house and contents had risen from $400 million to $464 million.

Mr Ryan said the council wanted as many people insured as possible.

A Fire Service tax through local body rates would be fairer and provide a broader revenue base.

"The Government is seeking to try to ensure that everyone pays the levy. Twenty per cent of people are not."

Last year a council investigation showed that with all those not paying the indirect tax, the Government was missing out on an estimated $60 million to fund the Fire Service.

Internal Affairs Minister George Hawkins is expected to present a paper to the cabinet within the next few weeks on abolishing the levy. Legislation would then follow.

He could not be contacted yesterday.