Public sector cuts: Health New Zealand introduces voluntary redundancies following overspend

Health New Zealand Te Whatu Ora is putting a voluntary redundancy scheme in place.

An email to staff from Health New Zealand chief executive Margie Apa, seen by the Herald, confirmed plans were being put in place for a number of workers.

Apa signalled further savings measures could be on the horizon, saying: “We are not opening up voluntary redundancy more widely at this stage”.

“However, we will enable any staff to pre-register their interest if they were to become eligible to apply in the future.”

She said Health NZ needed to move towards being more efficient, and focus its resources on frontline healthcare.

Several initiatives in place would “not resolve this financial issue or help ensure we have the right people in the right places”.

In a statement, the Public Service Association union [PSA] said the agency had issued a call for voluntary redundancy applications “to specialists working in health administration, advisory, and knowledge roles”.

PSA national secretary Kerry Davies said the agency was “being forced to meet the Government’s unhinged and unplanned defunding of healthcare, no matter the consequences”.

Davies added the country stood to lose workers who keep medical records safe and schedule scans and operations.

As the “majority“ of Health NZ costs were people-related, the agency needed to review its size and structure, Apa said.

“We are therefore providing the opportunity for eligible staff to consider voluntary redundancy ahead of likely formal change consultation processes over the coming months.”

Health Minister Dr Shane Reti confirmed the agency was working through a voluntary redundancy process, as part of a wider effort to be more efficient, “with resources focused tightly on the delivery of frontline healthcare”.

“As the commissioner has said very clearly, the clinical frontline will not be cut or reduced, and Health NZ’s plans are to [strengthen] it,” he said.

Expressions of interest are open from Thursday to September 13. It will be assessed on a case-by-case basis, with Health NZ making the only call on whether or not an application was approved.

“Inviting expressions of interest for voluntary redundancy is not a reflection on the individual’s performance,” Apa said, adding these can be “difficult times” for those involved.

A commissioner replaced the Health NZ board in July – considered the “strongest ministerial intervention available” by Reti.

Professor Lester Levy was appointed to a 12-month term.

At the time, Reti said the situation had “worsened” over months, adding the agency was overspending at a rate of about $130 million a month, mostly on back-office staff.

Health NZ earlier confirmed a recruitment pause on roles not patient-facing, as a measure to tackle the overspend. Apa was adamant staff and patient safety, and clinical delivery remained priorities.

The agency apologised last month after a “mistake” and “human error” saw some Waikato-based nursing graduates rejected from job offers.

Earlier this month, it was reported Health NZ would disestablish 126 roles from its commissioning team, and axe a further 142 positions that had been left vacant.

Voluntary redundancy processes have previously been put in place for some police staff, Oranga Tamariki workers, the Ministry of Social Development and mega-ministry MBIE, the Ministry of Business, Innovation and Employment; most plans had been progressed earlier in the year in response to the Government’s directive to cut back-office roles and find efficiencies in the public sector.

Azaria Howell is a Wellington-based multimedia reporter with an eye across the region. She joined NZME in 2022 and has a keen interest in city council decisions, public service agency reform and transport.