Op-Ed: Funding the Frontline and the Future

22 August 2025

Jimmy Higgins, CEO, Suncorp New Zealand

Climate change is shifting the ground beneath us, in more ways than one. It’s turning up the dial on weather extremes, especially flooding, and straining public systems that were never designed for this level of pressure. At the same time, it’s forcing us to confront a fundamental question: how do we pay for the future we need?

New Zealand has two very different answers to that question and neither is working well enough.

On one hand, we have Fire and Emergency New Zealand (FENZ), funded through a levy on insurance policies. It’s a stable and dedicated stream, but it relies on policyholders to pay for a service that now responds to everything from floods to car crashes and medical callouts.

On the other, we have flood protection - our most urgent and underfunded resilience need - backed by patchy, short-term grants and ad hoc co-investment schemes. Local councils are meant to lead this work, but they don’t have the tools, revenue or mandate to match the scale of the challenge.

This split has created a funding system that’s out of sync with the realities of climate risk.

Fire funding is stable - but increasingly stretched

The FENZ model dates back to the 1970s and is based on a simple premise: people who insure property should help fund fire services. But FENZ’s role today extends far beyond fires. It’s now an all-hazards emergency service, and that evolution hasn’t been matched by a modern funding base.

In 2021/22, just 31% of FENZ responses were to fires. Nearly 70% were for other emergencies, including natural disasters, medical incidents, car accidents and hazardous materials. Yet the system still relies almost entirely on levies collected from property insurance. In 2026–29, non-residential property owners are expected to contribute around $535 million per year, residential and contents policyholders around $215 million, and motor vehicle owners $146 million. Central government will contribute just $10 million.

That mismatch is getting harder to ignore. As the demand for non-fire response grows, so does the cost - but it's being loaded disproportionately onto a smaller group of people and businesses. It raises serious equity and efficiency questions and puts upward pressure on insurance premiums at a time when affordability is already under strain.

Flood resilience is chronically underfunded

At the same time, our approach to flood resilience is fundamentally reactive.

Flooding is already New Zealand’s most frequent and costly natural hazard. It’s also the one being most amplified by climate change. Yet the funding system treats it as a discretionary spend, left largely to local councils, with support from central government when damage has already occurred.

The 2023 North Island storms saw $883 million allocated for emergency response, followed by a $941 million package in Budget 2023. This year, the Regional Infrastructure Fund received $1.2 billion - with just $200 million earmarked for flood protection.

The science tells us this is backwards. We have increasingly precise data on flood risk, social vulnerability and climate projections. We know where investment is most needed. And we know that every dollar spent on resilience pays dividends by reducing harm, disruption and economic loss. But we lack the long-term funding mechanisms to act on that knowledge.

Jimmy Higgins, CEO, Suncorp New Zealand

A feedback loop that rewards inaction

The result is a dysfunctional cycle. Without consistent investment in protection and prevention, flood impacts escalate. That increases demand for emergency response - much of it delivered by FENZ, whose costs then climb. The fire levy rises again, hitting policyholders harder, even though the root problem lies elsewhere.

It’s a feedback loop that pushes costs onto the wrong people, in the wrong way, at the wrong time.

It doesn’t have to be this way

Other countries are further ahead. In the Netherlands, flood resilience is treated as core national infrastructure. It’s funded the same way we fund roads, energy and hospitals; with clear priorities, long-term certainty, and a shared understanding that prevention is a public good.

We need to apply the same thinking here. That starts with two shifts:

1. Modernise FENZ funding
   FENZ is no longer just a fire service. Its funding model should reflect its true role. One option is to evolve the fire levy into a broader national resilience fund - ensuring it’s fit for purpose, more equitable, and linked to the full range of services FENZ now delivers.
2. Create permanent, predictable funding for flood protection
   Councils can’t do this alone. We need a nationwide approach that gives them access to dedicated funding streams, backed by central government support where benefits are national or cross-regional.

This isn’t about shifting costs - it’s about sharing them. It’s about getting better outcomes with the same money, by investing earlier, more strategically, and more fairly.

The time to act is now

We’ve seen what happens when systems don’t keep up with risk. The cost - financial, emotional, social - is growing with every event.

We can choose a better path. Let’s fund FENZ in a way that reflects its modern mission. Let’s treat flood protection like the essential service it is. Let’s move from reaction to resilience.

Because in the end, it’s not just about who pays, it’s about what we’re willing to invest in before the next big storm.