Curran ClareFIRE AND EMERGENCY NEW ZEALAND BILLIn CommitteeDebate resumed from 14 March.Part 3 Levy (continued)CLARE CURRAN (Labour—Dunedin South): I will just quickly recap because it has been a week or 2 weeks. This is addressing Part 3 clauses 69 to 72 and perhaps beyond. This bill introduces a new insurance levy payment system which will fund the new Fire and Emergency New Zealand so this is a pretty important part of the bill. I was acknowledging and Labour acknowledges the concerns raised by significant stakeholders about that new levy system and the impact it would have on them.Serious concerns were raised by museums throughout the country. I think I was focusing on the Otago Museum which gave quite a powerful submission.Hon Ruth Dyson: Why is that? Why would you be doing that?CLARE CURRAN: Because it is one of the best—if not the best—museums in the country. I am not just being parochial here for a minute. The key point that it made in its submission was that if this bill remained in the form that went to the select committee its levy would increase by 300 percent. With its insurance costs already at 3 to 6 percent of operating expenditure such an increase would have a significant impact on the overall operations of the museum. I do not think we should just look at the Otago Museum; we should also consider other museums and what the other museums said. Museums Aotearoa also appeared before the select committee. One of its comments was that an increased levy was likely to impose significant financial hardship generally on museums and galleries which would need to be passed on to the communities of support. This provided an incentive to declare a low value and could lead to underinsurance. That is a really significant phrase really for us to consider as a country about our cultural heritage. It would also make the option of no insurance or self-insurance more tempting especially in the case of volunteer organisations.There are many more things I could point out about these submissions but thankfully the select committee did take this seriously. There were amending clauses and there was an acknowledgment of concerns about the levy. I do have a question for the Minister so I will get to it as quickly as possible. The committee said: We were aware of concerns about the levy being broadened to cover insurance on physical loss or damage." Those concerns included the relationship between FENZ services and the types of risk covered the levy payable and resulting costs and disproportionate increases in levy costs relative to risks. "Under the bill the levy cost based on a fully insured collection could increase substantially. The increased cost of the levy would seem disproportionate to some policyholders' need to call on FENZ services their potential to benefit from the services or their ability to fund the higher cost. It has suggested that the levy could be waived or capped in the case of public gallery or museum collections but could apply to their buildings or other property. We would like to see consideration given to this approach in the regulations proposed to be developed under this legislation." Then it noted under clause 106 of the bill which is in Part 3 "for FENZ to publicly consult on the making of levy exemptions and we consider that this would facilitate better public understanding of the potential benefits and consequences of the new levy regime."I have a question for the Minister. On 29 March the Minister released a media release on the levy rates for fire and emergency services. He was talking about the public consultation that had been undertaken in November 2016. He used a phrase and then he announced a range of levy rates that would come into effect from 1 July this year. He said: "Some commercial and public entities will face larger increases though the new legislation will allow for certain measures to address affordability and fairness concerns that were raised during the consultation process." I just want to know what that means. It sort of feels like code for something.I also note that I have seen a questionnaire that was sent to various entities museum collections and heritage buildings regarding the levy payments and asking their views on how that should work. They were asked whether they preferred a formula-based approach or a "by agreement" approach to determine the amount of relief for individual policyholders. The response that I have seen here—and I understand that that reflects a number of responses by entities—was that they preferred a "by agreement" approach. I guess I am asking the Minister what that phrase meant how he sees that playing out and is this comfort for the museum collections around the country that they are not going to be forced into a situation in which they underinsure or not insure at all as a result of this legislation? I know that they seem to think that the committee has listened to them. The commentary on this bill seems to reflect that but it still seems a little bit insubstantial in terms of what that actually means. I hope the Minister can clear that up for us tonight."