DHBs up to $2m shy on negotiated wage increase.

Hospitals do not have room in their budgets to cover nurses' pay rises this year, prompting concerns that services will have to be cut to meet the shortfall.

Five district health boards have either underestimated or do not have the funding to cover their nursing staff's wages. Documents released to the Labour Party showed the funding gap at these DHBs ranged between $500,000 and nearly $2 million.


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Labour's health spokeswoman, Annette King, said the shortfall showed DHBs were under-funded. "There are some DHBs which were always going to struggle with the settlement," she said.


"This is going to cause them to reprioritise, as it's called, to be able to pay for it.

"If they haven't got the money, then I think the Government should tell them what they have to cut."

Health Minister Jonathan Coleman said through a spokeswoman that DHBs had known the pay rise had been coming for some time and "they have to make provision for it within their budgets".

Auckland DHB budgeted $4.2 million for nurses' latest collective agreement in the 2015/16 year - $800,000 short of the required sum. Counties Manukau DHB had a funding gap of $1.8 million.

Neither DHB would say yesterday where savings would be made to pay nurses' wages.

Nurses' pay deals were negotiated between a group of DHB chief executives and the New Zealand Nurses Organisation (NZNO).

NZNO's industrial adviser, Lesley Harry, said she was surprised at the shortfall because DHBs had been given a clear indication of what members sought in negotiations.

Under the latest agreement, nurses received a 2 per cent pay rise last year and a 2 per cent pay rise this year.

Ms Harry said hospitals needed to offer good wages to attract quality candidates.

Under the new terms, newly graduated nurses received $47,000 and senior nurses received $65,000.

"Hardly a highly paid workforce," she said.

The funding gap was just one small symptom of larger funding pressures in the health sector, she said.

DHBs have been asked to find $138 million in savings this financial year, and some have indicated they are cutting costs through staff vacancies which have not been filled.

Funding gap - nurses' pay

Auckland DHB

• Cost: $5million

• Budgeted 4.2 million

Counties Manukau DHB
• Cost: 3.8 million
• Budgeted: 2 million

Mid Central DHB
• Cost: $554,000
• Budgeted: $1.1 million

Lakes DHB
• Cost: $2.3 million
• Budgeted: $1.46 million