Vote Health needs $1.1 billion increase to pay for rising population, costs and commitments

Operational health funding will need to increase by almost $1.1 billion in this year’s Budget. Of that, $721 million is needed just to maintain the current service. These are two key findings of a pre-Budget analysis of government health expenditure prepared by the New Zealand Council of Trade Unions and Association of Salaried Medical Specialists, released today.

“We estimate $721 million is needed just to keep pace with demographic growth and rising costs,” says CTU economist Bill Rosenberg. “Anything less than that would be a real cut in funding and will, inevitably, lead to a cut in services.”
However, on top of that the Government has committed to $375 million in new costs and commitments in the coming year including the TerraNova pay equity settlement. That brings the funding requirement to almost $1.1 billion.

Most of the health budget goes to the District Health Boards, whose combined budget requires an increase of $580 million to maintain services. The impact of new initiatives is still unclear so, when these are included, the funding increase required by DHBs will be even higher. For the first time, the analysis estimates the impacts on individual DHBs.

“Over the last seven years that we have been tracking the health budget there have been consistent shortfalls. The $1.1 billion would not help restore those,” says Rosenberg.

The Public Service Association National Secretary, Erin Polaczuk comments “Our tireless members are struggling to do more with less, and stress and workplace pressures are more intense than ever. And there’s still the question of when this Government will allocate long-overdue funding for equal pay settlements for social workers, administrative and clerical workers, and other undervalued female-dominated groups of workers.”

“The New Zealand Nurses Organisation says the facts show nurses’ reports of risks to patients are not exaggerated. NZNO President Grant Brookes says members are reporting everything from elderly patients missing basic hygiene like showering, to delayed medication, to dangerously low staffing and near misses in critical areas like newborn intensive care. “This analysis proves the systematic and serious funding gap reported by nurses through our Shout Out for Health campaign. Chronic underfunding is now affecting the whole health system."

Further details are available in the attached analysis, which is based on data from Treasury, the Ministry of Health, the DHBs and Statistics New Zealand.

The analysis and the spreadsheet containing the calculations are available at http://www.union.org.nz/category_media/health-working-papers/
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