Roger Sowry National Health Spokesperson

14 August 2001

Health reform costs grossly underestimated

Annette King's huge costs blowout of last year's health reforms show again how badly she is managing health, National's Health spokesperson Roger Sowry said today.

The fiscal implications report on the health sector restructure shows the cost for the 2000-01 year was $114 million instead of the estimated $77 million. It shows the net costs will be $17.5 million and $6.3 million over the next two years when they were estimated last June to be zero.

"The report shows there are ongoing costs with the reforms when we were told there would be none. It shows a continuing cost of $5.7 million from 2003-04, which Treasury estimates to be higher.

"If that cost overruns the 'additional costs will be met by compensating efficiency and effectiveness savings' - that means health cuts will pay for the overrun," Mr Sowry said.

"What this report is saying is that Annette King will fund her huge reform blow out from district health board 'efficiencies'. The boards are already at the bottom of the barrel, running up deficits and refusing to sign their funding agreements.

"We can't seriously have confidence in the figures released today if compare them with last June so there is no assurance that the costs of this unnecessary restructure will not continue to escalate.

"Annette King and the Ministry of Health got the costs of the reforms wrong. New Zealanders are now paying for it through their taxes and in losing health their services," Mr Sowry said.

Ends

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