A review will look at ways to fund the Fire Service other than through fire insurance levies on home owners, which could result in car owners and others who rely on the emergency service also paying levies.
Internal Affairs Minister Chris Tremain announced the review yesterday, saying that over time the Fire Service's role had increased to include other duties beyond dealing with fires and it was time to ensure that its mandate and funding model reflected that.
An independent panel would be appointed to advise on how the service operates, how it should be structured and its future funding.
Currently, the Fire Service was funded through insurance levies on homes and rural fire authorities are funded by local authority rates, with some funding also from the Defence Force and Department of Conservation.
Mr Tremain said the funding needed to be made more stable, equitable and predictable, and ensure those who actually benefited from the Fire Service were contributing to it.
Its duties had increased in line with community expectations. Those other duties included attending car and industrial accidents, and natural disasters.
Labour's Internal Affairs spokeswoman Ruth Dyson supported the review. Residential property owners paid a much greater share than the commercial sector, which was unfair.
The type of work fire fighters did was also wider than simply attending house fires - and included traffic accidents and building collapses - and a fair way of funding it was needed.
She said there were a lot of different options, including car insurance or registration, or through council rates. She hoped it was not an excuse for cost savings.
"That would be outrageous. Everybody knows the current Fire Service is not just underfunded, but funded in a way which is not fair or sustainable."
The terms of reference for the review state that the panel should consider who the Fire Service's current and future "clients" are and what its staffing and financial needs were likely to be.
It will also look at the current locations of fire services, the potential merging of some of the 76 Rural Fire Authorities, the assets the Fire Service has - including land and fire appliances - and ways to encourage volunteer fire fighters.
The review, which would not consider employment issues, is due to report back to the Government by mid-December.