22 August 2008
$30 Million Surplus All About Timing
Waikato District Health Board's $30 million surplus for the financial year ended June 30 is a timing issue and not a case of the board withholding services to produce surpluses.
Chief executive Craig Climo today said the surplus represented three percent of Waikato DHB's $1 billion annual turnover.
"The surplus, which is bigger than intended, came about largely because we couldn't do all that we'd planned in the year. We couldn't fund as much elective surgery as we wanted to because we ran out of surgical capacity and, in other priority areas, we are finding that it takes a long time to develop and implement funding proposals," he said.
"The health sector is growing and changing quickly and capacity is constrained."
As extra investment and services kick in the surpluses will disappear, said Mr Climo.
However, good board and staff management was also a contributing factor to the surplus.
"Our people know they have to live within their means.
"This is an organisation at full stretch. Waikato DHB is in its investment cycle - infrastructural investment, such as buildings, is at a low point. There's a huge programme of capital investment underway with more required. There's no argument that Waikato Hospital is in need of major physical improvement and that we should spend the money.
"The current campus redevelopment will see $300 million spent on buildings and related projects and we'll need another $130 million to complete the building programme.
"So while big surpluses aren't necessarily a good thing in a not-for-profit organisation, we will need them," he said.