Last month, we at NoTaxOnInsurance could not believe that while Australia has almost got rid of Fire Service Levy in all states, the New Zealand government elected to increase fire service levys 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 underinsure 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 insureds, 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.