A Government review is set to shake up funding of the Fire Service amid claims of freeloading by the corporate sector.

Internal Affairs Minister Chris Tremain yesterday released details of a review of the service, to be completed by the end of the year.

There was "quite a bit of leakage" in the existing funding model, in which the service is largely paid for via a levy charged with insurance premiums, he said. Those who did not opt for insurance did not have to pay the Fire Service levy.

According to terms of reference released yesterday, the review would consider whether "those who receive the various services performed by the [Fire Service] contribute to the costs for both fire and non-fire-related activities."

The work of the service was mandated by legislation more than 35 years old, but its operations had changed a lot since then.

"Only about a third of the incidents the service attend are fire-related," Mr Tremain said. "There is quite a significant range of rescue services performed now."

The Professional Firefighters' Union president, Steve Warner, said the funding model for the service had been wrong for years.

"The commercial sector of New Zealand gets a bit of a free ride on the residential sector and on the public sector and a lot of the things we do are unfunded."

The service was taking some in the commercial sector to court over alleged non-payment of their levy.

"They wriggle out of it every way they can," he said.

"I think at the moment the commercial sector is probably using about 60 per cent of the resources of the Fire Service and paying for about 40 per cent of it."

The review should consider moving to a property-based levy system so that all property owners paid, regardless of their insurance cover, he said.

"If that happens and everyone is paying then the people who are paying now are going to be paying a lot less and we'll probably get a better Fire Service."

Mr Tremain said it was fair to suggest that the service was "unfunded" for a lot of what it did.

"By looking at the mandate and the areas of service that they're involved in that begs the question - how are those areas funded," he said.

The contribution of the corporate sector to funding would be "within the ambit of the review" and the terms of reference offered "a good scope to look at the avenues of funding".

The review team, to be announced within the next week, would also look at the overall efficiency of the Fire Service, considering the potential for bringing some fire service infrastructure into other emergency services.

The review would not consider the industrial relations framework for professional firefighters or whether the management of fire on forest and rural lands should be provided by rural fire authorities.

- © Fairfax NZ News