Edmonds BarbaraFIRE AND EMERGENCY NEW ZEALAND (LEVY) AMENDMENT BILLSecond ReadingHon BARBARA EDMONDS (Minister of Internal Affairs): I present a legislative statement on the Fire and Emergency New Zealand (Levy) Amendment Bill. ASSISTANT SPEAKER (Hon Jenny Salesa): That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon BARBARA EDMONDS: I move that the Fire and Emergency New Zealand (Levy) Amendment Bill be now read a second time. Fire and Emergency New Zealand plays a critical role in keeping communities and people safe across Aotearoa. As a nation we have felt this deeply in the recent weeks with the devastating impacts of Cyclone Gabrielle. Faced with damage not experienced in a generation firefighters across the country have worked tirelessly to rescue the lives and the livelihoods of thousands. Two enormously brave individuals paid the ultimate price during this tragedy giving their lives to support their beloved Muriwai community. Dave van Zwanenberg a dedicated husband to Amy and father to Zara and George volunteered with his brigade on top of being a trusted local veterinarian—a man remembered as caring for others calmly under pressure whatever the weather. Craig Stevens devoted husband of Lucy and father to Kauri and Tai remembered as fighting valiantly to the end and described as exceptional at everything. We thank their families for sharing their loved ones with all of New Zealand and we are indebted to them. The role of Fire and Emergency has continued to evolve over the past two decades and includes more than just fighting fires. Career and volunteer firefighters protect our whānau and communities by responding to a range of emergencies such as motor vehicle accidents medical emergencies fires and search and rescue calls. When these unfortunate events do occur fire and emergency is there to ensure the safety of our people and limit damage to our property environment and whenua. Fire and Emergency also helps to prevent fires from starting in the first place. Through teaching fire safety to our tamariki from an early age and providing important information to all of us our homes businesses and other public and private property are kept safer from damage. Fire and Emergency relies on a levy on insurance policies for 97 percent of its funding. It is therefore critical that this levy works efficiently and effectively to ensure that Fire and Emergency can continue to deliver those essential services. The Fire and Emergency New Zealand Act 2017 (the FENZ Act) provides the framework for a new levy system. This system will come into effect once this bill has made important changes to the levy framework. This bill is an outcome of the Government's review of Fire and Emergency's funding model in 2019. This legislation will make sure that the new Fire and Emergency levy is simple and efficient to implement minimising disruption and compliance costs. The changes will help to avoid additional costs for the insurance sector which would ultimately pass on to New Zealanders taking out insurance. Measures such as the one addressed in this bill are a further example of how we can address the cost of living. It remains the number one issue for New Zealanders and is the number one priority for this Government. The changes made by this bill will mean that only property insured against the physical loss or damage from fire will pay the levy instead of property insured against any physical loss or damage. The levy will also be calculated on the sum insured and an insurance contract rather than the amount insured as currently used in the FENZ Act. These changes better align with insurance practice avoiding the need for complex calculations or the risk of property being levied twice. The bill changes the starting date of the new levy to 1 July 2026. This new commencement date will provide enough time for the insurance sector to implement the system and for remaining work to pass this bill and make associated regulations to be completed. It is another unfortunate impact of COVID-19 that has meant this work could not be completed as quickly as originally intended making this change to the commencement date necessary. A lot can change over the summer as we've seen with a new Prime Minister floods and cyclones and a new Minister. So I acknowledge the work of the previous Minister of Internal Affairs the Hon Jan Tinetti who brought this bill to the House in the first place. I'd also like to thank the Governance and Administration Committee for their consideration of the bill. I appreciate the time the committee's taken to understand this bill and the views of submitters. I recommend that the House take note of the select committee's report and adopt the amendments recommended by the committee. Several helpful amendments have been made to the bill to make its provisions easier to interpret. I'd like to acknowledge and thank those who submitted to the committee on the bill. Your suggestions have improved the bill. Submissions will also provide useful information to the Government as we progress regulations to make the new levy operational.Most submissions were in support of the bill noting that it would simplify the levy system reduce its administrative burden and make previously complicated provisions simpler. This avoids the need for significant system changes for the insurance industry and provides more certainty for levy payers.In addition to these comments there were other matters raised by submitters that I'd like to discuss further. Some stakeholders were concerned about the Government's decision to continue with an insurance-based levy for funding Fire and Emergency. While there are drawbacks to an insurance-based model alternative models also have significant issues. During the review of the Fire and Emergency funding model we found that an insurance-based model is fundamentality fit for purpose providing Fire and Emergency with the funding it needs as well as being the least-costly system to administer. It remains best option to fund Fire and Emergency in the medium term.However the Government notes that stakeholders continue to have concerns with the levy model. That is why we have brought this legislation to the House. It addresses some of the stakeholders' remaining concerns to ensure that the system we have works better for everyone. We worked closely with those affected by the changes to ensure that the amendments are pragmatic and achieve what is intended. Other submitters to the select committee were concerned that the changes under the bill would be less equitable than the current approach in the FENZ Act. At the heart of this bill is a trade-off between simplicity and equity. While the levy model in the FENZ Act was well-intentioned in practice it achieves a marginal equity gain at a significant cost. It is our view that the cost would outweigh the benefits which is why we're making those changes: to avoid excessive cost increases for New Zealanders taking out insurance.Other submitters noted their desire for the levy they pay to reflect the risk profile of their property. This is something that can be considered further when Fire and Emergency undertakes public consultation on the levy soon. Consultation will focus on how Fire and Emergency costs could be allocated amongst different insurance payers. Consultation on levy rates will enable the public to have further input into this new funding model.I'd also like to acknowledge the submitters from the forestry sector and museums and galleries who presented arguments for why they should be exempt from the levy. While these points cannot be addressed through this bill this Government will consider them as we make decisions of which properties should be exempt from paying the levy.Before concluding I'd like to once again extend my thanks to the select committee for their constructive consideration and to those who took the time to submit on the bill. This bill is an important step forward towards a fit for purpose funding model that will ensure Fire and Emergency New Zealand can provide those services so critical to our communities. I commend this bill to the House.ASSISTANT SPEAKER (Hon Jenny Salesa): The question is that the motion be agreed to.