Fire service levy plan 'too costly'

A new system of funding fire and rescue services will be unaffordable for many commercial property owners and tenants will shoulder the cost, the developer of a multimillion-dollar Nelson retail complex says.

A fire and rescue levy drawn from all property insured against any kind of loss or damage is proposed by the Government under new legislation to make funding the services more fair.

Currently, building owners with a portfolio of properties insured under a "first loss" policy pay a levy on the value of one single building. The government wants to change the law so a levy would be paid on the total insured value of every building covered by the policy.

Mark Schiele is director of Fashion Island Nelson, the developer of a retail complex on the former site of Nelson's Mitre 10, and is also director of its parent company Prime Retail, which manages several malls around New Zealand.

In a submission to a Department of Internal Affairs review, he said levy increases had been "anecdotally" estimated at between 50 and 1200 percent for various payers.

Higher levy costs to building owners would be passed on to tenants, tightening their profit margins, he said.

The higher levies could also see some commercial property owners seek insurance offshore.

Mr Schiele said it was unfair to use property insurance to levy funding as many property owners did not purchase insurance and therefore did not assist with funding the services provided by fire and rescue services, yet still received the benefit of their services.

He proposed fire and rescue services be funded through a general tax, as the police are. Centralised funding would reflect that the fire and rescue service existed for the public good for all New Zealanders.

Mr Schiele said the company had no "hard and fast figures" on how much more it might pay.

A spokesman for Internal Affairs Minister Rick Barker's office, Donovan Ryan, said the proposed changes were not designed to increase funding for a restructured fire and rescue service but were designed to make sure property owners paid their fair share.

Fire services currently cost $280 million to $290 million per year and Mr Ryan said the restructured service was expected to cost the same or less.

The proposed framework has also drawn criticism from rural volunteer fire services who say they will be compromised under a centralised fire and rescue service.

Brightwater and Tasman volunteer rural fire services and forestry company Weyerhaeuser have opposed a framework they say will make rural services a minor part of the new system.