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Increased Public Hospital Deficits Inevitable

Increased Public Hospital Deficits Inevitable; But No Need To Press Panic Button

“Increased public hospital deficits are inevitable but there is no need to press the panic button,” said Mr Ian Powell, Executive Director of the Association of Salaried Medical Specialists, today. Mr Powell was responding to suggestions that the deficits might reach $200m nationally and claims from National Party health spokesperson Roger Sowry that the system would implode.

“Increased deficits are the direct result of the government under-funding public hospitals at a level much less than the cost of running them. The Budget provided a mere $900,000 (0.03%) increase for existing services when costs are running at around 3.7%.”

“However, this is much preferable to the alternative of reducing access to the quality and range of patient services. Reducing services would end up costing more in the long run.”

“Mr Sowry is a bit rich in attacking high deficits. In the 1990s his National government had hospital deficits running around $200m. They only got around it by creative accounting in which the deficits were ‘switched’ back to central government.”

“At some point the government will have to deal with the deficits but it is not panic stations. They may wish to consider the creative accounting that Mr Sowry’s government used and transfer the politically created deficit away from hospitals,” concluded Mr Powell.

Ian Powell


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