Martin TraceyFIRE AND EMERGENCY NEW ZEALAND (LEVY) AMENDMENT BILLSecond ReadingHon TRACEY MARTIN (Minister of Internal Affairs): I move That the Fire and Emergency New Zealand (Levy) Amendment Bill be now read a second time.I would first like to take this opportunity to commend all those involved in battling the Tasman fires and ensuring our community's safety and well-being. The response to these fires also showed the benefit that Fire and Emergency New Zealand—a modern unified fire and emergency service—can deliver. Fire and emergency services have become our first defence against the effects of a changing climate responding to flooding landslips and bigger and more intense wildfires.The bill amends the Fire and Emergency New Zealand Act 2017 which I will refer to as the FENZ Act. The FENZ Act reformed the law relating to fire and emergency services bringing together rural and urban fire services to form a single organisation: Fire and Emergency New Zealand or FENZ. The bill's amendments all relate to the levy-based system to fund FENZ.The bill amends the commencement date for sections 80 to 140 of the FENZ Act. These sections provided for a new levy-based system. They are due to come into force by 1 July 2019 while a transactional regime currently applies. The levy system is implemented by insurers and brokers. Insurers and brokers would need to make considerable changes to their systems before sections 80 to 140 come into force. It has become apparent that these changes will not be able to be made before 1 July 2019. This bill therefore changes the backstop commencement date for sections 80 to 140 to 1 July 2021 with the ability for this to be brought forward by Order in Council.Further to this I intend to table a Supplementary Order Paper at the committee of the whole House stage which amends the commencement date to 1 July 2024. The 1 July 2024 date will allow time for a first-principles review of the funding model for FENZ. Funding FENZ through a levy on property insurance is largely a carry-over from the previous fire services regime. This model of funding has some weaknesses such as: property owners who choose not to insure are able to free ride as they do not pay a levy but still benefit from FENZ services charging a levy on insurance can increase insurance costs and can reduce the incentive for people to properly insure their properties and levy collection is complex to administer for insurers and FENZ levy income may become uncertain as the commercial insurance market evolves. Shifting the date out to 1 July 2024 will prevent the need for further amendment to the FENZ Act if a new funding model is to be implemented for FENZ. It also ensures that FENZ will remain funded for the duration of the review.I would like to thank the Governance and Administration Committee for its constructive consideration of this bill. I would also like to thank the 10 submitters on the bill particularly those who made time to make oral submissions to the committee. The committee has recommended amendments to the bill in response to some of the issues raised in submissions. The Government supports these recommendations and amendments have been made to reflect them.Under current policy settings public museums and galleries pay a levy on insurance for their collections. This bill will exempt the collections of cultural heritage bodies like public museums art galleries whare taonga and archival institutions from 1 July 2019. This exemption applies to items or collections that these cultural heritage bodies exhibit or conserve to enable public education public enjoyment or the preservation of the items. The exemption doesn't extend to their buildings and the institutions must be non - profit-making and open to the public. This measure will ensure that institutions which are guardians of items of significant cultural value many of which are irreplaceable aren't charged a levy out of proportion with their likely need for FENZ services.The committee recommended amending clause 8 to insert a definition of cultural heritage bodies" for the purposes of the levy exemption. The definition of cultural heritage bodies requires museums whare taonga archives and art galleries to meet a list of relevant criteria. The committee also recommended that archives and cultural heritage items be defined to provide greater clarity around what institutions to which the exemption will apply. The exemption was set to come into force when the new levy regime was implemented. Now that the implementation date of the new levy regime has been deferred exempting collections held by cultural heritage bodies from 1 July 2019 will achieve the Government's policy intent straight away despite the delay in implementation.My Supplementary Order Paper will also exempt the New Zealand Defence Force from a levy. This exemption recognises the significant contribution the New Zealand Defence Force makes to fire services in the community. The committee recommended amending clause 5 to insert a new subsection (4A) into section 141 of the Act which empowers the making of levy regulations. This subsection provides for a minimum four-month lead time from when levy rates are set to the date on which they come into force. This will give insurers certainty around when they will need to implement changes to levy rates.I am pleased that this bill is continuing to progress through the House. It will allow us to make sure that our fire services are appropriately funded for the very important work they do to keep our communities safe. Again I would like to thank the select committee for their efforts and commend the bill to the House."