The existing arrangements are in accordance with a complicated and narrow funding model first introduced in 1979.  These arrangements have not changed to reflect the current operation of our fire and emergency service functions, including greater mobility, technology changes, longer fire seasons, increased response duration, and the impact of climate change.  The current arrangements do not include funding for the State Emergency Service, which is also not currently funded in an appropriate or sustainable way.

Our emergency services currently rely on seven different funding streams, including three levies: insurance fire levy, a property-based levy, and a motor vehicle levy.

The Blake Review, and feedback on the Treasury Options Paper, highlighted that the current funding arrangements are complex and not fit for purpose, with recommendations that the insurance fire levy should be replaced with a property-based levy.

Insurance based taxes are widely considered to be inefficient given the additional cost they apply to insurance premiums and how they distort behaviour by deterring businesses from taking out sufficient insurance. They are also an unstable funding stream as they only apply to certain insurance policies and it is not compulsory to have an insurance policy.

Under the current model the property-based levy (known as the fire service contribution, which is paid through your council rates) is based on the brigade classification system. This means if you own a property near a career brigade, you pay more than someone who lives near a volunteer brigade.  There are also different rates depending on which council area you live in.

This is significantly outdated – our fire and emergency services (career or volunteer) respond to everyone in our community equally and without hesitation. They don’t take any boundaries into consideration when they respond. Ultimately it means that some people pay less than others but receive the same high-quality service.

The draft TFES Bill proposes a simple, fair, and sustainable model to fund our fire and emergency services in accordance with the recommendations from The Blake Review, and feedback on the Treasury Options Paper.  This model ensures both TFS and SES are funded appropriately now, and into the future.

The proposed funding model in the TFES Bill:

• abolishes the Insurance Fire Levy;
• simplifies the property-based levy (currently known as the Fire Service Contribution, which is paid through your council rates); and
• continues the existing Motor Vehicle Levy in its current form but extends it to include motorcycles.

The Motor Vehicle Levy

The current Motor Vehicle Levy will become the Motor Vehicle Fire and Emergency Service Levy and will be extended to include motorcycles.

In 2023-24 the fee per registered vehicle is $21, and this fee will continue to be indexed annually with movements in CPI. If you currently receive a concession on your Motor Vehicle Fire Levy, the concession will continue to apply to the Motor Vehicle Fire and Emergency Service Levy.

Concession Rate Increase

The Tasmanian Government is proposing to increase the concession rate for the Fire and Emergency Service Levy and the Motor Vehicle Fire Levy from 20% to 30%.

The eligibility criteria for a concession will not change.

The new fire and emergency service levy will be calculated using a property’s Assessed Annual Value (AAV) (found on your council rates notice) multiplied by the relevant land classification rate.  The land classifications are based on land usage.

Your levy = your AAV x your land classification rate (refer to the Proposed land classification rates table) – your concession*

*if you are eligible for a government concession

The fire and emergency service levy will replace the current Fire Contribution Levy on your council rates notice.

Current Fire Service Contribution Funding model

The Fire Service Act 1979 prescribes the current funding arrangements for the State Fire Commission (SFC), which is the governing body for the TFS.

As noted in the Blake Review, these arrangements are extremely complex and highly prescriptive, with funding being provided from a range of sources.

This includes a property-based levy. Under this levy, where you live determines what you pay for the fire service. As a result, some households pay $44 per annum, and some paying over $400 per annum.  This is because the rates are currently set according to the local government area where a property is, and whether it is supported by a career, volunteer or retained brigade.

However, our fire and emergency services do not operate this way and will regularly move in and out of local government boundaries to provide emergency response. For example, large regional fires often receive career brigades and aircraft response, or a motor vehicle accident will have the first crew available attend.

The following table demonstrates the inequities – this includes that there are inequities across local government areas, as well as inequities across urban and regional areas.

Table 1 – Examples – Current Funding Model Inequities

To resolve these inequities, the Blake Review (2020) provided 16 recommendations for funding reform, and consultation on models was undertaken in 2022.  As a result of the feedback from the consultation, the Government is proposing two models that are possible for implementation under the current draft Bill, which is also available for consultation.

The current model results in high levels of funding uncertainty and variability for the TFS and SES on a yearly basis. This means funding projections can vary significantly from future deficit (as per the 2021-22 Corporate Plan), to projected surplus (as per the 2022-23 Corporate Plan), which stifles service planning, restricts investment in facilities and equipment, reduces the support available for volunteers, and impacts on important work like fuel reduction activity.

Current arrangements are not sustainable or effective to support an emergency service that needs to grow and invest regularly in new equipment to provide lifesaving services and meet the needs of the future.

This is why Tasmania needs a fairer approach to funding its fire and emergency services to allow the TFES to effectively plan and deliver services for all Tasmanians.

We are proposing to:

• Remove the insurance-based levy
• Reform the property-based levy
• Keep the motor vehicle levy and include motorcycles in this levy

Property based levies are used extensively in most other jurisdictions. Tasmania’s emergency response resourcing is therefore at significant risk in the future if action is not taken.

To achieve this, we are proposing two options:

• Option 1 – set a single rate across Tasmania, or
• Option 2 – set a two-tiered rate across Tasmania depending on whether you live in a rural or urban area.

These options are described in further detail in the next section of this webpage.

To resolve the current situation where Tasmanians pay more than 29 different property rates (see table 1), the Government proposes that all residential properties pay a fixed amount – 1%.

This means no matter where you live in Tasmania, everyone is paying the same rate.

For a property with an average AAV, this would therefore be $180. If you have a higher value AAV, you will pay more. If you have a lower value AAV, you will pay less.

In doing this we can be confident that Tasmania has a fair and sustainable funding model that is applied equitably across Tasmania.

As part of equalising the current payment model we are proposing there would be different rates for other land classifications. This is to recognise that the fire and emergency response at commercial or industrial premises are often of greater risk or complexity to respond to than residential property.

Table 2 – Proposed Land Classifications – Option 1

Option 2 proposes a two-tiered rate to be introduced across Tasmania with one rate for urban areas, and another for regional areas.

The outcome of Option 2 would be that urban areas continue to pay similar rates as they do now – but, the rate would be standardised removing inequities between cities.

For regional areas there will be a smaller increase than under Option 1, but the goal of equalisation for these areas would still be achieved meaning there is greater equity between rural areas.

In practice, this will result in regions paying less than a pensioner in an urban area.

The proposed two-tier system is in Table 3.

Table 3 – Proposed Land Classifications – Option 2