Health budget just treading water

Published: June 17, 2024

Deeper analysis of the 2024/25 Health Budget reveals just a 0.4 per cent real-terms increase in operational health funding, far short of what is needed to address systemic staffing issues or achieve ambitious health targets set by the Minister of Health.

A joint analysis by the Association of Salaried Medical Specialists and the New Zealand Nurses Organisation finds the Budget does not allow for expansion of, or investment in, the health workforce.

While Vote Health received a total increase of $1,739 million of combined operational and capital funding, most of that increase is capital funding to cover historical claims under the Holidays Act.

“Vote Health’s operational budget only increased by $93 million, or 0.4 per cent from estimated actual spending in 2023/2024,” executive director Sarah Dalton says.

“At absolute best this is a ‘treading water’ budget – barely keeping the system’s head above the surface. And the water level is rising.

“A lack of real investment means a continuation of the status quo – and that means large workforce shortages and longer wait times for patients.”

The Minister of Health’s proposed healthcare targets also look doubtful.

“We do not believe the wait time targets are attainable, based on the lack of investment in the health workforce,” Dalton says.

“Prior to the Budget Te Whatu Ora advised the Minister the total modelled cost for increased planned care delivery was $723 million if fully-funded. That is not present in the budget.

“Targets without the funding to support them are just a stick to beat our workforce with.”

The report also raises other concerns:

  • The Government plans to “save” $14.3 million through people not collecting their prescriptions when the $5 fee is reintroduced. People not using prescribed medicines will only lead to further health needs.
  • Medical school placements increase by 25 instead of the proposed 50. The lead time for students to become senior medical officers is more than a decade.
  • Pharmac funding is $225 million less than estimated actual spending in 2023/2024
  • Manatū Hauora Ministry of Health funding is cut $51 million (18 per cent) from estimated actual spending.
  • The Health and Disability Commissioner budget has been cut by $2.9 million, and the Health Quality and Safety Commission by $1.4 million. This will impact monitoring and protecting of patients.

The ASMS report  Just Treading Water can be downloaded from https://asms.org.nz/just-treading-water/