An overhaul of the fire service is set to increase the levy paid by Auckland's MOTAT by 138 per cent, its director says.

Michael Frawley and other representatives of Museums Aotearoa have warned that New Zealand's national collections could be placed at risk by new legislation that will revamp the fire service.

"We estimate that...our levy will increase by 138 per cent," Frawley told Parliament's government administration committee today.

"If it goes up to that magnitude that will have an impact on our ability to fund education and other programmes."

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All firefighters including volunteers, career staff and brigades in urban and rural areas will be pulled together into a single national service under the reforms.

Internal Affairs Minister Peter Dunne has said the changes are the biggest reform of the fire service since 1947, when the Ballantyne's store fire in Christchurch led to a sector overhaul.

The reforms promise greater investment in volunteer firefighting, which made up 80 per cent of the sector.

The main funding source - levies on property owners who take out insurance - will not change.

However, while the current fire service levy is based on insurance for fire damage, the new legislation proposes that the levy will be based on insurance covering physical damage to, or loss of, property.

This change will come into effect from July 1, 2018.

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The Government says the change reflects the fact that the fire service responds to a growing number of non-fire incidents, such as flooding. It also makes it harder for some levy payers to avoid contributions.

New Zealand has about 500 museums ranging from Te Papa to volunteer museums and historic houses.

Frawley said museums had no objection to paying the levy based on normal commercial assets, but there were problems when the levy took into account the insurance valuation of collection items.

He submitted there should be some form of waiver or cap on the portion of levy based on collection items.