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Home / New Zealand

How health is looking if National's Budget 2019 proven right

Lucy Bennett
By Lucy Bennett
Political Reporter·NZ Herald·
28 May, 2019 12:39 AM5 mins to read

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Finance Minister Grant Robertson says no major Budget initiatives are in the public domain. Photo / Mark Mitchell

Finance Minister Grant Robertson says no major Budget initiatives are in the public domain. Photo / Mark Mitchell

Budget 2019

If some of the figures released by National today are correct, the health sector is looking at a lean Budget 2019.

Finance Minister Grant Robertson has dismissed the information released by National, saying some of it is correct and some of it isn't and people should wait until Thursday for the "real Budget".

But assuming that some of the figures are correct, the health sector, which will be looking for a big boost this year, could be disappointed.

Leaving major initiatives aside as Robertson said they weren't in the public domain, Vote Health - which received $18.2 billion in last year's Budget - would receive a top-up of $1.6b if the overview released by National is correct.

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DHBs would receive $13.98b compared with $13.23b in the last Budget, while the Ministry of Health would get a boost of $14m to $207m for operating costs.

And most other funding moves up only fractionally, by less than a percentage point in some cases, or not at all. Equity support for DHB deficits, for example, would go down $5m to $134m)

Most DHBs are running deficits and Health Minister David Clark has refused to sign off on three annual plans.

The DHBs, which the Government has previously said are the victims of years of underfunding, received a boost in last year's Budget - $2.2b over four years with up to another $100 million over 10 years for deficits.

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They also received $750m of new capital for urgent building works. Most of that has now been spent.

There are pressures on health from all sides – from ageing infrastructure that needs still fixing to Government promises yet to be fulfilled.

The Government has already said addressing mental health and addiction services will be a cornerstone of its first so-called Wellbeing Budget. The restoration of a mental health commission, central to its plan to change the way mental health and addiction issues are dealt with, will be a big ticket item.

The information released by National today includes no mention of that, in line with Robertson's assertion that what the Opposition released was only partial information.

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It does contain an increase in the amount spent on mental health services. If National's figures are correct, it would more than double from last year's $68m to $141m this year.

The Government will respond to the mental inquiry tomorrow but will not announce much money will be pumped into it until Budget Day on Thursday.

It has begun rolling out its promised youth mental health support – free counselling for all under-25s - with the Piki programme for those aged 18 to 25, although it is still in a pilot stage and limited to Wellington, Porirua and Wairarapa for now.

The Government has promised to reduce the cost of GP visits for everyone but so far it has been limited to community services cardholders and their dependents plus those on accommodation subsidies. Free visits for under-14s have also been introduced. But that leaves a large chunk of the population yet to receive cheaper GP visits.

The New Zealand First coalition agreement with Labour includes free annual health checks, including eye tests, for the more than 720,000 SuperGold Cardholders. That has yet to eventuate, although scoping work is being done.

There is no mention of this in National's release today, meaning it is either included in the Government's new initiatives yet to be announced, or will remain on the backburner until Budget 2020.

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Pay settlements could still take up a fair amount of the health budget, with National's figures showing pay equity would go from $348m in 2018 to $414m in Budget 2019.

Other figures released by National include a modest increase in maternity services funding of $8m to $189m, a drop of 0.1 per cent in real terms. Elective surgeries would remain at 2 per cent of funding – from $364m last year to $396m in Budget 2019.

There is no mention in the figures of funding for the drug-buying agency Pharmac, which has been under pressure from patients and their supporters, as well as pharmaceutical companies, to fund a wider range of drugs. It received a large boost last year and took over all DHB spending on drugs. It is also expected to take over purchasing for all medical devices soon.

Council of Trade Unions economist Bill Rosenberg and Association of Salaried Medical Specialists director of policy and research Lyndon Keene last week said Health's operational expenses would need to rise by an estimated $1.3m or 7.7 per cent from $16,972 million in the 2018 Budget to $18.3m in Budget 2019 just to keep up with population and cost increases.

"We calculate that to restore funding to the level it was at in 2010 in real terms, taking account of rising costs, population growth and the ageing population, would require the Government to allocate at least $20.2b - an additional $3.2b," they said.

They estimated DHBs' combined budget needed to rise from $13.23m to $14.28m to maintain the current level of DHB services and cover population and cost increases.

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"Additional to this are expectations of the Budget. For example, one of the objectives of the Budget is 'Supporting mental wellbeing for all New Zealanders, with a special focus on under 24-year-olds' which almost certainly will include a response to the Mental Health Inquiry, called as a result of the high public concern at the state of mental health services," said Rosenberg and Keene.

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