Labour will maintain public health provision - Cullen

Finance Minister Michael Cullen today reassured middle and higher income New Zealanders that a Labour-led government would not move to a fully user-pays health system.

Dr Cullen was commenting on a research paper released today by the Health Funds Association on the long-term funding of New Zealand health care.

The report suggests a variety of mechanisms to transfer to employers the health care costs of their employees and to require people earning $38,000 plus to pay for all their own health services.

“The basic assumption behind the analysis is that health funding is out of control and that it is necessary to introduce stronger value-for money disciplines.

“As Finance Minister I am acutely interested in getting good value from the health dollar, improving health productivity and containing health spending within affordable limits.

“But although there are real cost pressures on the health budget, the projections used in the report are significantly larger that Treasury estimates. For example: the report projects health spending to rise to 63 per cent of GDP by 2050 but Treasury projections are for a much smaller increase to 10.8 per cent.

“Similarly, the report’s author assumes a health inflation factor of 8 per cent a year compared to Treasury’s figure of 1.5 per cent. The basis for this contention is highly dubious.

“The report’s attempt to argue that everybody would be better off if middle income New Zealanders paid for the full cost of health care is little more than snake oil medicine.

“But, of course, it does serve the interests of those who funded the research,” Dr Cullen said.

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