National leader Bill English has issued a warning to the next Director-General of Health that they will have to deliver on some "unreasonable expectations".

A new person will be chosen to take on the role after the current Director-General, Chai Chuah, announced yesterday that he would step down in February rather than complete his five year term.

Chuah was criticised when Labour was in Opposition, including over a Budget bungle in which $38 million for DHBs was wrongly allocated.

A performance report on the Ministry of Health commissioned by the State Services Commission is expected to be released this week.

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Health Minister David Clark would not comment on the findings of that report or be drawn on whether it had any influence on Chuah's decision to step down.

Asked if he had asked Chuah to resign, Clark said Chuah had decided it was time for fresh leadership and he agreed.

He said the Ministry of Health had poor performance reviews in the past and he had made it clear to the State Services Commission and the ministry that he expected the ministry to have good relations with the health sector.

"My job as minister is to set the expectation now. I did that. The Director-General indicated to me he thought it was time for some change and some new leadership. I agree with him."

He said Chuah would not get a pay-out. "He will finish up under the normal terms of notice."

Clark has also moved to appoint an advisory panel, saying it would help restore trust in the system.

English said it was a demanding job and Chuah had done parts of it well.

"The expectations that have been created for the public health system are now enormous and anyone who is taking that job on needs to understand they will be under a lot of pressure from the current government to meet what are in some respects, unreasonable expectations."

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He said Labour had created an expectation "that everyone will be able to get what they want" and that there was enough money to do that".

"And that simply can't happen.

"There are always limits to what you can provide in a public health system and this Government hasn't been honest about that."

English said there was always tension between the front line and the Government on health.

"That won't be any different with this Government."

He said Labour had also brushed over complex issues such as suicide and seemed to think it could be improved by sheer will alone.

"If it was that easy, it would have been done years ago."

English said Clark's decision to appoint a five-strong advisory panel looked as if he was trying to get some cover for when he could not meet the expectations.