Aviation industry slams new FENZ levy proposal

Aviation industry slams new FENZ levy proposal | Insurance Business New Zealand

Insurance News

Aviation industry slams new FENZ levy proposal

Industry head highlights sky-high costs

Insurance News

By
Roxanne Libatique

The Aviation Industry Association has voiced strong opposition to Fire and Emergency New Zealand’s (FENZ) plan to extend its fire insurance levy to include domestic aircraft.

Currently, FENZ’s fire insurance levy applies to homes, vehicles, and other properties. The proposal aims to extend this to domestic planes and helicopters beginning in July 2026, with a proposed rate of 11.51 cents per $100 of insurance.

“For a rescue helicopter, that’s $9,000 in levies per year. For an aircraft valued at $10 million, it’s $11,500, and it just goes up from here. These are very excessive levies,” he said, as reported by RNZ.

He highlighted that the aviation industry had previously been exempt from these levies due to its limited use of FENZ’s services.

“Domestic aviation is a negligible user of FENZ services,” he said. “There were less than 40 callouts to aviation last year, out of 88,000 [total callouts], so 0.045% of all callouts come from domestic aviation.”

Fire insurance levy cap in New Zealand

For homeowners, the fire insurance levy is capped at $100,000 of insurance coverage, meaning they pay no more than $106 per year, increasing to $119.50 with the upcoming rate adjustment in July.

However, Wallace pointed out that the proposed levies on aircraft would not have a cap, potentially resulting in significant expenses for aviation businesses.

“If there is to be a levy at all, it should be capped,” he said. “FENZ needs to come back and talk to the sector about it, which hasn’t happened.”

He added that the proposed levy would impact the entire aviation industry, including commercial airlines, agricultural operators, rescue helicopters, and flight training schools.

Additionally, the association expressed frustration over the lack of response from FENZ and government officials.

“[We] lodged a submission last Friday, we have written to Minister of Internal Affairs Brooke van Velden, we’ve asked for a meeting with her… we have heard nothing to date,” Wallace said.

The adjustments include a 5.2% increase in the levy to support FENZ’s services and a reassessment of levy distribution across different insurance policy categories.