Director General of Health Chai Chuah will quit the role early, referring to "controversy" over his time in the role and the need for a new person for the role.

In a statement, Chuah – who was strongly criticised by Labour when it was in Opposition - said he had been considering for some time that the health system needed a new person to take it forward.

He always believed the health system needed to tackle the challenges ahead as one team and while progress was made with the release of the NZ Health Strategy "it has not been without controversy in the system".

"At this time it is increasingly important for the sector to operate in a unified way if we are able to accelerate and further embed the gains we have already made.
For that reason I have decided to conclude my time early."

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Earlier this year, Chuah came under attack from Labour and its health spokesman – now Health Minister – David Clark over Chuah's management of the health sector following an embarrassing Budget blunder that saw $38 million wrongly allocated to DHBs. That prompted State Services Commissioner Peter Hughes to get involved and rebuke Labour for its public attacks on Chuah.

Chuah said it had not been an easy decision for him and he was proud of the work done.

He will end in the role on February 2 next year and an Acting Director General will be appointed until a replacement is selected.

Peter Hughes said Chuah had signalled to him in July that he was considering stepping down early. He said Chuah could be proud of his time in the role, which included the health strategy for the next 10 years delivering on National's "Better Public Services" targets and overseeing the implementation of the pay equity settlement for care workers.

"In making his decision he has put the system first and I respect him for that."

Health Minister David Clark issued a short statement acknowledging Chuah's resignation and thanking him for his service but refusing to comment further.

"Leadership and relationships are key parts for our health sector's success. I look forward to continuing to work with the health sector's leadership to deliver quality health services, which all New Zealanders deserve and expect," Clark said.

Chuah has been Director of Health since November 2013 and was previously national director of the National Health Board and chief executive of the Hutt Valley District Health Board.

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A review of the Ministry of Health commissioned by the State Services Commission earlier this year is expected to be released soon.

After the Budget blunder in July and reports of conflict between DHBs and the Ministry of Health, Clark had complained to Hughes about the performance of senior management in the sector, including a high staff turnover.

Former Minister of Health Jonathan Coleman said his only comment was that after two decades in health management, Chuah had understandably decided to do something else: "And I wish him well."