A boost of $691 million will be needed in the Budget's operational health spending for the public health system just to maintain the existing level of services, unions say.

But in real terms, an increase of that size would "represent a further decline in public health funding over recent years", said Ian Powell, executive director of the Association of Salaried Medical Specialists which, with the Council of Trade Unions, has analysed health spending, ahead of Thursday's Budget.

"We're seeing the effects of that decline in the number of people who are really struggling to be treated for a wide range of conditions. These are ordinary New Zealanders who can't get the surgeries they need to get them back to work or leading active lives."

If the Government's pre-Budget announcements of new health services are included, the increase in operational spending would need to be more than $750 million -- for the system simply to stand still -- Mr Powell said.


CTU economist Bill Rosenberg said most of the health budget went to district health boards, whose combined budget required an increase of $551 million to maintain the current level of DHB services.

"But if recent media reporting is accurate, DHBs will receive only $340 million to cover these additional costs. If that is correct, DHBs will face a funding shortfall of $211 million just to maintain current services, and up to $261 million when new initiatives so far announced are taken into account.

"There has been a substantial shortfall over the last six years we have been tracking the health budget. Any further shortfall will see more deterioration in services, much of which is hidden from view in areas such as unmet health need and staff shortages."

The Green Party tonight said the CTU analysis showed the Government needed to "invest massively in the health sector".

"This Government has failed to fund health properly ... ," said Greens health spokesman Kevin Hague.

It has increased health funding annually since first elected in 2008, but critics say funding has not kept up with rising healthcare costs and population pressures. Labour says this amounts to a "cut" of $1.7 billion.

Health Minister Jonathan Coleman has rejected talk of a cut, noting that "the Health budget has increased by $4 billion over the past seven years to a record $15.9 billion".

Budget documents last May showed the estimated spending for 2015/16 (both operational and for capital) was to increase by $311,576 from the estimate for 2014/15.