Presentation to the New Zealand Institute of Forestry conference 30 August 2016 Dunedin Fraser Fyfe, FENZ Transition team

Acceptance of change A review led by Hon. Paul Swain in 2012 paved the way for legislative change but progress was interrupted by the 2014 election Cabinet subsequently agreed to the Fire Services Review with a wider scope that included funding and overall effectiveness of fire services By the time of the Fire Services Review in 2015, the sector was in a stronger position to know what type of fire services were needed, and how they should be supported and funded (given the risks communities face) Stakeholders agreed the problems facing the fire services would have more impact in the future, unless they were addressed now Ministerial expectation that the Review would deliver: – a ‘fit-for-purpose 21 st century fire service that is flexible, modern and efficient; – fire services that work well, are adequately funded, and that value the workforce and volunteers.

What the reviews found Changing expectations are putting the fire services under pressure (public, society, environmental i.e. climate change) Lack of coordination within and between fire services; unclear accountability for non-fire, and variable leadership (multiple governance structures) Investment is inconsistent with some communities’ needs; driven by who delivers the service, not by risk Cultural differences between urban and rural and between volunteer and career firefighters – cultural differences generate operational issues and grievances Fire Service Levy does not adequately align costs to where potential use lies, is out of date and ambiguous and is not adequately aligned to performance framework

Five themes emerged 1.Volunteers – need better support 2.Community – importance of retaining community involvement and local identities 3.Service delivery – increase effectiveness by leveraging national opportunities, clarity on non-fire responsibilities, recognition of differences between rural and urban fire delivery in any new model 4.Funding – how funding allocated, who should fund (particularly rural fire) and how, a need for fairness and equity 5.Transition – an appetite for change; criticality of a well-managed transition, focus on volunteers and keeping stakeholders involved

Decisions after the Review Government announced in November 2015 that a unified fire services organisation would be set up with local committees New appointments to the Board, with effect 1 April 2016, to provide strong governance of the reform, and to provide expertise in leading significant change 29 April 2016, Government announced: – new name: Fire and Emergency New Zealand – detailed design – funding package of $303 million to implement reforms 30 June 2016, Fire and Emergency New Zealand Bill introduced to the House

Fire and Emergency New Zealand Minister of Internal Affairs Appoints Fire and Emergency New Zealand Responsible for delivery of 4Rs for fire and 2Rs for mandated emergency service functions Responsible for training and competencies Local Committees Advise organisation on regions' risks and needs Regions based on principles of efficiency, risk and public consultation Local Government Land owners Department of Conservation Emergency Services Department of Conservation New Zealand Defence Force 3 year Agreements Unified Workforce DOCContractorsForest Owners New Zealand Defence Force Industry Brigades $ Model of the new organisation

Transition – approach & pace Integration by Day One, 1 July 2017 Unification at end of four-year transition, 30 June 2020 Phased approach, most likely to be based on: – Location (different localities brought in at different times) – Relative size (larger brigades/VRFFs are brought in first) – Risk (areas where the greatest risks are brought in first) – Readiness (motivated to get going and an openness to trial “new”) Preferred option is phased with an accelerated programme of change in the early years (0-4yrs) with benefits expected to be realised over time (5-10 years).

Commission cost is $383.7m for the 2015/16 year (forecast, including $50m Capital Expenditure Programme) Rural fire is estimated to cost $22m for the 2015/16 year There is a lack of transparency around the financial baseline of the Commission and knowledge about rural fire services In 2016/17 the Minister seeks a review of the Commission’s operations and performance to obtain a new baseline, and undertake a comprehensive analysis of rural fire services. This information will be used to inform the transition to the new organisation and its likely costs. The challenge: understanding what it costs to support a modern, fit-for-purpose fire service Current costs of current fire services

FIRE SERVICES MIXED FUNDING MODEL New organisation cost est $487 million per annum 1.Levy from insurance on property material damage $420m in 2017/18 2.Levy from insurance on motor vehicles (extended to third party) $45m in 2017/18 3.Government public good contribution $10m in 2017/18 $ A more sustainable funding model $

Changing the Fire Levy Will be fairer and reflect all fire service activity that benefits New Zealanders Changes reflect the legal mandate to respond to a wide range of non-fire emergencies, and that all levy payers benefit from this Broadened to include insurance on material damage, not just fire damage Extended to third party motor vehicle insurance - so nearly all drivers will contribute Deterrents for those who attempt levy avoidance Government sets the new levy rate but in future public will be consulted Levy reviewed every three years Funding cycle to be connected to the new organisation’s business planning and accountability process Increased oversight and transparency of new three year funding arrangements, with public consultation

Transition – funding Slide 11

$191 million new money over 4 years ($47.75m on average per year) Up to $112 million over four years repayable Crown injection for the transition programme New organisation will increase its revenue for the above subject to: – A review of the operations and performance of NZFS this year, together with an assessment of rural fire costs to form national view on cost of fire services – Detailed business case Investing in fire services while driving for value for money for levy-payers New money

$23.3m volunteer supports – e.g. additional support services, financial incentives for employers, self-employed and volunteers, employer recognition programme, wellbeing initiatives $1.3m regional committees – ongoing support $17.3m to address rural fire service gaps – e.g. reduction activities, urgent capital upgrades, personal protective equipment, training needs, maintenance gaps $5.9m finance, ICT and Corporate because a larger organisation is needed to support entire sector The government will invest more in volunteers, rural fire and supporting a single unified organisation that represents broad interests What will new funding of $47.75m per year be spent on?

Transition to the new organisation Over four years, broadly to: transition 40+ organisations (of different legal status) to create new organisation engage with 12,000 volunteers (organised in 650 brigades and rural fire forces) who move into a direct relationship with new organisation re: building on strengths, retaining what works work effectively with and support asset owners and legal entity owners/boards regarding transition engage rural and urban in new operational policy informed by legislation so that it’s ‘fit-for-purpose’ not ‘one-size-fits all’ better levy information and process address gaps in ICT and emergency communication technology engage effectively with the sector on matters ensure transition programme has capability and capacity to be effective

Fire and Emergency New Zealand Bill Provisions of the Bill come into force at different times – some provisions are on day after Act receives Royal Assent est. March 2017 – most provisions are 1 July 2017 – a later date (by Orders in Council) Discussion Documents – Regulations (consultation closed 18 August), Levy (next couple of months) Update on legislation and regulations Bill introduced 30/6/16 Select Committee Second Reading Committee of whole House Third Reading Royal Assent eta 3/17 First Reading In1SC2CH3RA Progress of the Bill