Health Minister Simeon Brown said his priority was ensuring all Kiwis have access to timely, quality healthcare. Photo / Jack Riddell
Health Minister Simeon Brown said his priority was ensuring all Kiwis have access to timely, quality healthcare. Photo / Jack Riddell
The Government is expected to exceed its $400 million target in relation to cutting contractor and consultant spending, compared with the 2023/24 financial year.
Health New Zealand – Te Whatu Ora is forecasting a $204m cut compared to that financial year, making up more than half of the Government’s on-track goal.
The public health agency has been using contractors to fill vacant roles, something the Association of Salaried Medical Specialists is opposing.
Half of the Government’s target to cut $400 million of spending on contractors and consultants is set to be slashed from just one agency.
Health New Zealand – Te Whatu Ora is aiming to take the scalpel to contractor and consultant spending amid the Government’s savings drive.
It’s forecasting a full-year spend on contractors and consultants of $447m, a reduction of $204m compared with what was spent in the 2023/24 financial year.
The Government department had budgeted $290.8m on contractors and consultants for the 2024/25 financial year. In the year to February, Health NZ spent $338m on contractors and consultants.
“The spend above budget in contractors is partially offset by underspend in personnel costs where vacancies have been covered by contractors (including locums)‚” Health NZ interim chief human resources officer Fiona McCarthy said in a statement.
A majority of Health NZ’s spend on contractors and consultants in the current financial year has been on “clinical staff, specialists for Holidays Act Remediation work, digital and infrastructure initiatives,” McCarthy added.
Health NZ spending above budget in contractors was said to have been partially offset by underspend in personnel costs, where vacancies were covered by contractors.
The Government department blamed a global shortage of health workers in specific clinical areas as a reason why it has to use contractors to maintain service delivery, rather than employing permanent medical specialists, which it said it would rather do.
Association of Salaried Medical Specialists executive director Sarah Dalton questioned why the agency did not put more investment into finding salaried staff, rather than employing locums.
“The cost of investing in permanent salaried staff is absolutely known to pay off. It is cheaper than employing locums – it provides more certainty,” Dalton argued.
“We want to see permanently appointed doctors come here and work and stay. We want more New Zealand-trained graduates staying, and we want to bring in overseas-trained doctors to work here as well,” she added, suggesting better working conditions would attract more doctors.
Health Minister Simeon Brown said it was his expectation that all functions of the public health agency provided or enabled frontline services to deliver healthcare to Kiwis.
Health Minister Simeon Brown said Health NZ was reducing its spending around contractors and consultants, "in line with Government expectations". Photo / Mark Mitchell
The minister called out Labour’s spending on contractors and consultants in the wider public sector, saying it “ballooned” under the previous Government.
Brown said Health NZ was reducing its contractor and consultant spend, “in line with Government expectations”.
Azaria Howell is a multimedia reporter working from Parliament’s Press Gallery. She joined NZME in 2022 and became a Newstalk ZB political reporter in late 2024, with a keen interest in public service agency reform and Government spending.
