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Why Waikato DHB Voted against 'Break Even' Budget

Waikato DHB's deficit: why Board member voted against 'break even' budget

Yesterday (Wednesday 27th September), the Waikato DHB voted to approve a' break even' budget for the 2017-18 year, by 10 votes to 1.

The 'break even' budget actually shows a small deficit of $481,000.

I was the sole vote against the budget being approved.

It is unusual for the DHB Board to even hold votes - this was perhaps only the second in my time on the Board.

I felt that the information supplied to the Board by DHB management clearly showed that the 'break even' figures would not be able to be achieved in the current financial year, and that it would therefore not be fiscally responsible for the Board to approve a budget that it knew was unrealistic.

As well as the $481,000 deficit already shown, management identified a further $8.5 million* of suggested savings that were at "high risk" of not being able to be achieved in the current year, and a further $13.5 million of savings at "medium risk".

On top of these figures, management identified that the current valuation of DHB buildings meant that a further $10 million of depreciation needed to be set aside, but this was not included in the budget and the Ministry of Health is to be approached for additional support to cover this particular amount - I supported that part of the decision.

The true budget deficit that should be proposed to the Government by Waikato DHB should be a minimum of $8.981M in operational expenses, with a further $10M capital expense deficit.

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In no organisation that I have ever been involved in would approval have been given for a budget where the Board knew there was a high risk of not achieving the figures proposed, and even medium risk amounts would normally be reduced to levels that could be realistically expected.

As an elected member, responsible to the residents of the Waikato region, I am not going to support a budget going forward to the Government that I know cannot be met.


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