The New Zealand Government needs to abolish the Fire Service Levy on Insurance

As you all know, I have worked strongly over the years looking at getting the Australian government to abolish all tax on insurance, namely the Fire Service Levy, from all states. We have been successful in many areas, the New South Wales government is currently phasing out the Fire Service Levy there.

Last month however I could not believe that while Australia has almost got rid of Fire Service Levy in all states, the New Zealand government elected to increase it by a staggering 40%.

What has been proven in Australia, time and time again is that to impose tax on those prudent and risk adverse enough to insure is a disincentive, causing people to not insure or if they do to under-insure themselves, ie insure for less than their total sum insured.

The latest spate of earthquakes should be a stark reminder to the government of New Zealand that it is in everyone’s interests, individual insured’s, communities and the national economy that people are fully insured in the event of a standalone fire or a major catastrophe such as an earthquake.

As we have reported so many times now, everyone in the community benefits from a fully funded and highly trained emergency service and as such all of us in the community should pay for it, not just those that insure.

The tax ought to be immediately removed from insurance and placed on property rates so that every single person in the community whether they are a home owner or renter, contributes towards the fire services.

It is now time for the New Zealand government to have a close honest look at Fire Service Levy’s and do the right thing in removing it from insurance.