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Home / Business / Personal Finance / Tax

<i>Fran O'Sullivan:</i> Health fund may gobble tax cuts

Fran O'Sullivan
By Fran O'Sullivan,
Head of Business·
29 Sep, 2007 04:00 PM5 mins to read

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Fran O'Sullivan
Opinion by Fran O'Sullivan
Head of Business, NZME
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KEY POINTS:

Are New Zealanders in line for personal tax cuts after the 2008 general election or will they find any cash from any so-called tax cuts drafted into a personal account at a new Government health fund?

This could be a reality if the results from the NZ Business
Council for Sustainable Development's latest ShapeNZ poll are taken at first blush by the Government or Opposition.

The council, which is trying to increase its own footprint on future policy development, is promoting the results of its latest survey, which it maintains shows strong cross-party voter support for major health reforms.

In a nutshell the results boil down to these:

* Sixty-eight per cent of New Zealanders support using taxes to create a new Cullen-type fund to pay for future health needs for an ageing population (the council claims 62 per cent still support this notion even if it means delays in personal tax cuts).

* Fifty-eight per cent support extending ACC to cover catastrophic illness, such as cancer, where the treatment is long term.

* Fifty-one per cent support private health service providers also being allowed to compete for additional Government money for operations and other services.

* Thirty-five per cent approve the gradual phasing in of compulsory health insurance for everyone in employment under the age of 50, with taxpayer-funded coverage for those aged under 18 and over 50.

As expected, people are divided over whether the health system has worsened, depending on their own locality. Major concerns are waiting lists, the cost of visiting a doctor and non-surgical cancer care, such as chemotherapy and radiotherapy.

I've discounted a separate lot of results which break down respondents into party preference support as the sample seems too small to give credence in the way the council intends, particularly as the detailed policy options and any Budget finance implications will not be released until October. But the questions are still nevertheless worthy of being asked.

Where the council needs to do a bit more work, and this may well be in the pipeline, is in carrying out research into the effects of the current system on future budgeting requirements and some detailed analysis on the trade-offs.

The questions are clearly based on a static analysis of future budgeting requirements. There is no evidence that trade-offs, such as people working into their 70s and thus reducing their own health drag on the overall Government fiscal revenues, have been probed.

Or even that people might just opt to die rather than be a burden on younger generations - if services are appropriately rationed.

Council CEO Peter Neilson, a former Associate Finance Minister in the fourth Labour Government, is a practised player. Neilson has been promoting a debate over the funding of the country's future health provisioning, to be discussed with senior Cabinet ministers at the council's business budget summit at Wellington Town Hall on November 1. Neilson maintains he's not acting as a cipher for Finance Minister Michael Cullen on this score.

But the council's campaign to influence the Finance Minister would have more credibility if the survey were based on reaction to published policy prescriptions and full-flown data which examine potential trade-offs, rather than simply what appears like an inhouse poll geared towards those already in tune with the council's sustainability outlook.

The council's ShapeNZ polls are administered internally by the council's communications manager, Graeme Colman, rather than commissioned externally from reputable research companies.

Neilson is confident that the ShapeNZ poll has cast-iron credibility.

He points out that people have to register to take part in the panel, which is rated alongside a nationally valid sample which the council has purchased. He says some former ACNielsen staff have helped with the design and calibration of the polls.

It can't be swamped by people or parties who decide to take advantage of its essentially voluntary nature, Neilson maintains.

That said, Neilson would die in a ditch when it comes to the extrapolation of the poll's findings, down from national to local levels.

There are 4500 people registered to take part in the poll. The problem is less than a quarter of the council's panel had taken part in the rolling poll by the time the first results were published two weeks ago.

The sample of 747 respondents does not seem to be sufficient to justify a claim of accuracy to plus or minus 2 per cent but Neilson says matching up of previous council polls to those done elsewhere underlines the accuracy.

The poll requires respondents to register their names and email addresses and past voting preferences (they can choose to ignore this point), which is different to the confidential process which underlies most third-party polling.

Put that to one side. The real issue, which the council has responded to, is to get a debate going on New Zealand's future health needs. Neilson should be congratulated for that.

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