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News Worthy - 13 June 2008 - No. 250

News Worthy - 13 June 2008 - No. 250

13 June 2008 - No. 250

Secure healthcare

Something is clearly wrong when the Government has doubled expenditure on health but hospitals are spiralling into deficit even through the Government promised not to let that happen.

Buried in the fine print of last month's Budget is the revelation that nine of the country's DHBs are expecting to run up huge deficits in the next financial year: Auckland, Counties Manukau, Tairawhiti, Hawke's Bay, Whanganui, Capital and Coast, West Coast, Otago, and Southland.

Apparently there is a $24 million deficit at Wellington's Capital and Coast DHB - more than double what was expected. Last week, Hutt Valley DHB admitted to a possible $6 million to $9 million deficit after planning to break even.

Southland's deficit has jumped to more than $6 million. MidCentral's deficit is expected to be over $7 million - four times the original estimate.

The response of Finance Minister Michael Cullen is that "cost containment strategies" are being put in place. It is not clear what that means in the context of sick or injured people.

Ironically, Helen Clark campaigned in Opposition on a promise that 'the deficit funding of the public health sector has to stop. We should fund a balanced budget for our public health services - not a deficit budget'.

The New Zealand political economy

This month, Kerry McDonald, a well-known professional company director who was previously the director of the New Zealand Institute of Economic Research and then Managing Director of Colmaco, gave his insights in a published paper which was sub-titled "Ineffective policies, lost opportunities; miserable results and serious risks".

It is a devastating indictment of the Labour-led Government and looks at a range of key performance indicators and key issues.

His comments include that an NZIER analysis of the Government's recent report Economic Development Indicators 2007 concludes: the 24 underlying determinants of New Zealand's living standards are "heavily clustered" in the "low" and "deteriorating" performance ratings. Twelve were rated low, 10 medium, and 2 high. In addition, 13 were deteriorating, 2 steady, and 9 improving.

Productivity is "low and deteriorating", and its growth has been at or below benchmark countries since 1980. New Zealand was also "low and deteriorating" in savings, international trade, outward foreign direct investment, management skills, exchange rate, balance of payments, and net foreign assets. The tax system was "deteriorating" as the rest of the world has been steadily reducing tax rates and New Zealand's share of total taxes from personal and corporate income is high! That is a woeful picture.

A referendum on MMP

When MMP was introduced we all believed there would be a further referendum. Not so. The plan was only to conduct a review that was conducted by a parliamentary committee dominated by minor party representatives.

The result, of course, was a foregone conclusion. The cynic would say that "turkeys don't vote for an early Christmas". These ones proved the strength of that aphorism.

If National wins the next election it has promised a referendum on MMP. That is not to say that some form of proportional representation would not be inappropriate but that it just might not be MMP.

Finance Company collapses

If you are interested in this issue, I made a speech to the Institute Financial Advisers on Wednesday - here is the link: Speech - Institute of Financial Advisers of-Financial-Advisers.html


I have joined Facebook, and if you would like to join my page, the link is

Facebook has an interesting history. It was started in February 2004 and, by one count, is ranked seventh in terms of traffic. It has more than 70 million active users worldwide.

The website's name refers to the paper facebooks depicting members of a campus community that some American schools give to students and staff as a way of getting to know other people on campus.

Come and join.

Political Quote of the Week

"A vision is not a vision unless it says yes to some ideas and no to others, inspires people and is a reason to get out of bed in the morning and come to work" - Gilford Pinchot - American conservationist and public official, was chiefly responsible for introducing scientific forestry to the United States (1865-1946)

Dr Richard Worth
National Party MP


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