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Health gets three-year funding path

“The $3.2 billion three year health funding path laid out in Budget 2002 will enable the sector to plan for service delivery in a genuinely strategic way,” Health Minister Annette King said today.

The package provides a $400 million boost each year beginning with $400 million in 2002-03 and rising to $800 million in 2003-04 and to $1.2 billion in 2004-05. In addition to this is another $800 million over the three years for anticipated demographic changes and accident costs.

Ms King said there was also new funding to meet extra demand for health services from population growth ¡X $101 million in 2002-03, $197 million in 2003-04 and $295 million in 2004-05 (the equivalent of $96 million and $98 million of new funding in 2003-04 and 2004-05 respectively).

“The level of new funding and the certainty it provides was warmly welcomed by much of the health sector when the first announced late last year,” Ms King said. “I think it will be welcomed even more warmly now it can be seen so clearly how strongly health spending stacks up in terms of its percentage of all new government spending.

“Of the $6.124 billion of new spending since this government came into office, $1.284 billion, or almost 21 per cent, has been allocated to Vote Health. Health has been the big winner under this government, and it will continue to be so because the new funding has gone into baselines.

“No longer will boards have to live hand-to-mouth from year to year, not knowing what funding will be. They will know what is coming, and they must manage and plan according to that knowledge. There is increasing evidence that that is what they are doing.

“However, DHBs must now stay within their indicative funding path. While the government recognises that some difficult decisions will need to be made, our expectation is that the elected boards will make the necessary decisions based on available funding and the needs of local communities.”

Ms King said that, alongside the DHB money, the government would inject more than $400 million in new funding into primary health care as it began implementing the Primary Health Care Strategy.

“Investing in primary health care is the most likely way to improve our health status significantly and to reduce health inequalities. This is the most important development in caring for the health of New Zealanders since the first Labour Government introduced patient subsidies,” Ms King said.

Specific funding increases for 2002-03 include:


- $120 million as a price adjustment for DHB Provider arms

- $100 million for demographic changes

- $50 million for primary care

- $7.4 million for Mason funding

- $5.7 for medical oncology

- $2.6 for breast screening

- $3.8 for well settled over stayers

- $13 million for aged care residential pricing

- $47.5 million for increased accident costs

- $148 million to maintain services and efficiency projects in the sector

- $20 million to maintain national contract funding

- $14 million to fund national technology and efficiency projects

- $35 million for the meningococcal vaccine programme

- $9 million for community services card access

- $0.2 million for a complementary medicines database


- $3.2 million for the enhancement of information technology systems

- $114 million to provide deficit and capital project support for DHBs

- $65.4 million of new debt funding for DHBs for new capital projects

- $29.7 million of new capital funding to meet increases in residential care loans

- $15 million transfer from 2001/02 for RHMU to finance property transactions.

- $20.7 million for sector capital projects

- $134 million in refinancing of debt facilities


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