Budget 2026 has failed to deliver meaningful change in health funding says Policy Advisor for the Association of Salaried Medical Specialists Virginia Mills.
“The pre-committed funding for cost pressures is just a holding pattern for workforce shortages and continued unmet need.
“Sustained periods of underfunding over the last 25 years have eroded the system’s capacity”, says Mills
“New data from the OECD shows that New Zealand’s public health expenditure fell further behind an average of 16 comparable countries than previously estimated in 2025.”
“It’s also clear that the gap between New Zealand and the average of the 16 countries is beginning to open up again in 2023 and 2024.”
The impact of the historic and current underfunding is seen in spiralling rates of unmet need. In 2025, 20 per cent of referrals for first specialist appointments were declined, and the delivery of planned care treatments increased by just 2 per cent as detailed in ASMS’ recent report Unmet, Unmeasured and Unseen: The Invisible Waitlist for Care.
“The cost pressures uplift will barely keep the health system treading water. Health targets and outsourcing have failed to make meaningful progress against waiting list numbers.
“Crucially, Health NZ has no idea of the extent of unmet need for care because they don’t collate declined referrals nationally.”
The absence of information has real-world impacts, including care rationing due to chronic staffing shortages, unsafe and unsustainable rostering practices and poor workforce and service planning.
“Dialysis services have had to advise patients that they may not receive the treatment they require due to demand and short staffing; workloads for psychiatrists at Hillmorton Hospital are unsafe and sustainable; and the last gastroenterologist at Palmerston North Hospital has now resigned.”
In 2025, ASMS’ survey of more than 350 clinical directors found an unmet need vacancy rate of 32 per cent, nearly three times as high as Health New Zealand’s official vacancy rate of 13 per cent.
“Health is a priority issue for a majority of New Zealanders. Investing in our health system over and above cost pressures is the only way to tackle unmet need and make real gains for patients, whānau and the health workforce.”
