Is the new Victorian Government's Emergency Services and Volunteers Fund (ESVF) fair?

Introduction

Victoria’s (Australia) emergency services play a critical role in protecting lives and property during times of crisis, including floods, bushfires, and storms. As climate change and population pressures increase the frequency and severity of natural disasters, the demand on emergency services continues to grow. In response, the Victorian Government is replacing the existing Fire Services Property Levy (FSPL) with a broader Emergency Services and Volunteers Fund (ESVF) from 1 July 2025.

This change is designed to provide stable funding for a wider range of emergency agencies. However, the move has sparked a broader debate around the fairness, sustainability, and design of emergency service levies—both within Victoria and in comparable systems overseas, such as in New Zealand.

The shift from FSPL to ESVF

The FSPL, introduced in 2013, currently helps fund Victoria’s fire services by collecting an annual levy through council rates. Property owners pay a fixed charge based on property type and a variable rate linked to the property’s capital improved value. The levy contributes substantially to the budgets of Fire Rescue Victoria (FRV) and the Country Fire Authority (CFA).

Under the new model, the ESVF will expand funding to additional agencies such as VICSES, Triple Zero Victoria, and Forest Fire Management Victoria. Like its predecessor, the ESVF will be collected through local councils and will feature both fixed and variable charges. It aims to raise more revenue to match the growing demands on emergency services and recovery efforts. Variable rates will increase, and categories such as vacant land will be reclassified to reflect broader land use.

To acknowledge the contribution of volunteers, the government has also introduced a rebate scheme for eligible CFA and VICSES personnel.

Concerns about fairness and impact

Despite the broader scope and intention to align with other states, concerns have been raised about the fairness and transparency of the new levy. Some stakeholders argue that the change will lead to higher costs for families, farmers, and businesses without guaranteed improvements in emergency response.

Specific objections include the lack of differentiation in service levels between urban and regional areas, the potential for sharp increases in levy payments due to property revaluations, and the burden placed on rural communities that rely heavily on volunteer services. Calls have been made for measures such as capping annual increases in line with inflation and revisiting how properties are classified for levy purposes.

Critics argue that the levy system does not adequately reflect the actual use or risk level of properties and instead relies too heavily on property value as a basis for contribution.

Lessons from New Zealand

New Zealand’s approach to funding its Fire and Emergency services (FENZ) offers a useful comparison. A recent proposal to increase the levy by 5.2% for property owners has met with significant resistance. BusinessNZ, a leading business advocacy group, has recommended that any funding shortfall be addressed through a substantial increase in direct government contributions rather than further burdening levy payers.

The group suggests that a fairer funding model would combine contributions from three sources: insurance-based levies, government funding for the public benefit aspects of emergency services, and user charges where appropriate. They argue this would strike a better balance between public and private responsibility.

Furthermore, BusinessNZ has raised concerns about the methodology behind levy calculations. They recommend capping charges for non-residential property, noting that basing levies solely on the sum insured may not accurately reflect the cost of service delivery. They also advocate for independent oversight of the cost allocation methods used by FENZ, citing potential cross-subsidisation between different property types.

These insights from New Zealand highlight the importance of transparent and equitable funding models that reflect both the benefits received and the capacity to pay.

Conclusion

While the introduction of the ESVF in Victoria is a response to the growing demands on emergency services, it also raises legitimate questions about fairness, proportionality, and system design. As seen in the New Zealand experience, simply increasing levies without a clear and equitable framework may lead to community pushback and perceptions of unfairness.

To build public confidence and ensure long-term sustainability, governments may need to consider more balanced funding models that reflect both private risk and public benefit. This could include a mix of levy contributions, direct government funding, and targeted user charges. Transparent rate-setting, regular reviews, and engagement with stakeholders—especially in regional and volunteer-reliant areas—will be essential in developing a levy system that is both fair and effective.