Brooke van Velden slams FENZ spending, launches major reform of ‘unfair’ levy system

Wednesday, 17 June 2026

Internal Affairs Minister Brooke van Velden has taken a swipe at Fire and Emergency NZ (FENZ) over a persistent pattern of under-delivery and financial mismanagement, while simultaneously revealing plans to overhaul a funding system she says is “unfair”.

Speaking to Parliament’s Governance and Administration Committee, as part of Scrutiny Week hearings, van Velden voiced frustrations over FENZ’s inability to deliver on its capital programme despite sitting on large reserves of cash.

Last month, FENZ told the same committee it will be $154 million short on the funding needed to bring its ageing fleet into line over the next decade, as it faces pressure from staff and the public to upgrade equipment.

The select committee started a parliamentary inquiry into issues with the fire truck fleet earlier this year.

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But van Velden said the agency was staring down a $24m underspend this financial year against a projected $117m forecast, driven entirely by ongoing delays in property and fleet procurement.

She said the spending failure comes despite the fact that the organisation boasts a projected year-end cash position of $152m.

Even factoring in a conservative $50m buffer for emergencies and liquidity, van Velden rejected the narrative that FENZ is financially constrained.

“The level of cash on hand is difficult to reconcile with any suggestion that affordability is the primary constraint on delivery,” van Velden said.

“The money is there. The money is available. It has been set aside… However, the figures coming through don't necessarily align with the fact that they are meeting that plan.”

Van Velden also accused FENZ of providing outdated forecasting data during 2024 fire and emergency levy consultations.

Once officials questioned and forced an update to the modelling, the proposed levy hike was slashed from 5.2% to 2.2%, she said.

She said previous board chairperson Rebecca Keoghan was replaced after failing to provide adequate oversight. Former Watercare boss Raveen Jaduram was brought in to head the board last month.

She also defended a controversial decision to increase board member fees, saying it was to ensure the $900m levy fund was managed with a higher tier of governance.

Van Velden said she was “shocked” by historical monitoring failures, noting that previous Department of Internal Affairs (DIA) advice often repeated FENZ's statements word-for-word rather than independently analysing or challenging them.

In response, DIA deputy secretary Amanda Moran told MPs there had been an overhaul, establishing an agreed monitoring framework, a six-person dedicated team, and a chief adviser appointed to shift the department from basic reporting to deeper intelligence gathering.

Van Velden revealed she is considering a long-term shake-up of how FENZ is funded. Currently, 95% of its budget is derived from the levy tacked onto private insurance contracts.

However, 2017 legislation added non-fire related functions for FENZ to perform, such as responding to medical emergencies, maritime incidents, and severe weather events and disasters.

Van Velden said that given this widened mandate, it was valid to question if the model was fair for levy payers and fit for purpose.

She pointed to statistics that showed that only about 59% of call-outs are fire-related, a figure which also includes false alarms. The remaining 41% of their workload now consisted of medical emergencies and severe weather responses.

She described a 'free rider' issue where everyday New Zealanders with private insurance are footing the bill for a public good used by everyone.

“I personally don't believe that it's fair in the way that it is currently established,” she said. ”We are asking people who have insurance contracts… to fund severe weather event responses, as well as medical event responses, as well as fund people who have never bought private insurance.“

DIA officials have been instructed to work alongside councils and the Insurance Council to investigate alternative funding models. However, she said a final decision would not be rushed to Cabinet before the November election.

Van Velden, who is stepping down at the election, said it would be a breach of “good faith” to enact a completely new funding model right before a vote.

A report is due before the election. She said this would give any future government have comprehensive data to tackle the issue.