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Bonding plan to tackle health workforce crisis

John Key MP
National Party Leader

18 September 2008

Bonding plan to tackle health workforce crisis

National Party Leader John Key says a National-led Government will take practical steps to start tackling the shortage of doctors, nurses, and midwives.

Today he has unveiled plans for voluntary bonding of health professionals in the second of a series of health announcements.

“New Zealand is desperately short of doctors, nurses, and midwives. The health system is in crisis, with workforce shortages in many professional fields. National has fresh ideas to address the health workforce crisis.

“Voluntary bonding will be part of a toolkit to improve graduate retention. This is the first part of our comprehensive health workforce plan.”

Mr Key says National will introduce a ‘voluntary bonding’ scheme offering student loan debt write-offs to graduate doctors, nurses, and midwives agreeing to work in hard-to-staff communities or specialities.

National will consult organisations including the professional colleges and universities and the Ministry of Health to identify the professions and geographical areas where shortages are critical.

“We expect to be able to offer eligible candidates write-offs of up to $10,000 a year. The amounts would be payable at the end of three years, with the option to continue in the scheme for an additional two years after that.”

"We expect 50 to 100 doctors a year will qualify, along with about 200 nurses and midwives. The annual debt write-off for nurses would be around $3,500 based on current average debt levels at graduation.

“The cost to the taxpayer for this scheme is very reasonable, starting at around $3 million in year one, and rising to $9 million in year three.”

“We want more of our doctors, nurses, and midwives staying in New Zealand and working in areas that are hard-to-staff. This programme will incentivise them to do so, and relieve some of the staffing pressure in those areas.”

“Research indicates the longer that new graduates stay and work in a community, the more likely they are to continue working in that community or return there after working elsewhere.”

In practical terms, for a new doctor with a $75,000 debt, after three years, the government will pay $30,000 of that debt. If the doctor then chooses to stay in the scheme for another year or two, then as a result of their own loan repayments and their bonding payment, they will be debt free. A nurse with a debt of $30,000 would also be completely debt-free after five years.

Other details of the policy include:

- The first three years of annual write-offs will be made when the professional has been in place for three full years. The remaining write-offs will be made annually.

- There will be flexibility in the scheme to allow for training and maternity leave.

- The scheme will be extended to other health professional groups over time.

- The scheme will operate alongside graduates’ compulsory minimum student loan repayments.

- The programme will be open to those who have graduated since 2005.


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