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Minister of Health cannot have his cake and eat it
Minister of Health cannot have his cake and eat it
Minister of Health Tony Ryall’s statement in Parliament yesterday, which implied that the Health budget is both keeping up with inflation and demographic change and will deliver “massively improved front-line services”, does not withstand scrutiny, says the CTU.
A pre-Budget CTU analysis (available at http://union.org.nz/health-working-papers) showed that a $512 million increase in operational funding for Health was needed simply to keep up with an estimated 2.4 percent rate of inflation and an increased and ageing population. However, Treasury and Reserve Bank forecasts of inflation in 2011 now predict CPI is likely to rise by between 3.3 percent and 3.9 percent excluding the increase in GST, adding between $34 million and $58 million to the “stand still” requirement.
Cost shifting as a result of the cuts in ACC entitlements will also erode the Health budget. The Budget included new services and restructuring costs of $158 million which will add a further $118 million, even allowing for productivity gains, bringing the total shortfall to between $152 million and $176 million.
“There is no free lunch,” said CTU Economist and Policy Director Bill Rosenberg. “If your boss gives you a pay increase just big enough to cover the increased cost of living you can’t start doing things you couldn’t afford before. If you did, something else would have to give. The Health budget shortfall can only be met by some combination of cuts in services, deterioration in quality of services, increased user charges or increased District Health Board deficits.”
ENDS
New Zealand Council of Trade Unions
Te Kauae Kaimahi
The New Zealand Council of Trade Unions Te Kauae Kaimahi brings together over 350,000 New Zealand union members in 40 affiliated unions. We are the united voice for working people and their families in New Zealand.
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