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Sir Arnold Nordmeyer Lecture - PM Speech

Tuesday 7 August 2001

Rt Hon Helen Clark
Prime Minister

Sir Arnold Nordmeyer Lecture

School of Medicine

5.10 pm

Tuesday, 7 August 2001
Thank you for the invitation to give this year's Nordmeyer Lecture.

Sir Arnold Nordmeyer's contribution to public life was distinguished. He entered Parliament in 1935 with the Labour landslide of that year as MP for Oamaru. He played an active role in the development of the First Labour Government's social security policy, before himself becoming Minister of Health for six years in 1941. He then served as Minister of Industries and Commerce, and in Sir Walter Nash's government from 1957 ¡V 1960 as Minister of Finance.

In 1963 Arnold Nordmeyer became the sixth Leader of the New Zealand Labour Party and its first New Zealand born leader. He served for only two years as Leader before being displaced by Norman Kirk. He retired from Parliament in 1969, but remained in public life as a member of the Wellington Hospital Board in the early 1970s and chaired the Council of this Clinical School when it was established in 1974. It is a wonderful tribute to Sir Arnold to have this annual address dedicated to him and, from this evening, the Large Lecture Theatre will also bear his name.

In my address this evening I will talk about the health and social security legacy of Sir Arnold and his colleagues, and about how that legacy was undermined by both economic insecurity and by neo-liberal policies which created significant poverty and inequity in New Zealand.

It has fallen to this Labour-led Government to address health inequities in the context of addressing broader socio-economic inequity, while also endeavouring to build a stronger base to the economy so that it can fund better health and other essential services for the long term.

The first Labour Government came to power as the great depression was ending with an active programme for economic and social justice. Central to its programme was social security, of which health policy was a key part. That government achieved a great deal in health policy, ensuring free public hospital care and access to a wide range of health benefits. Unlike its counterpart in Britain in the 1940s, however, it did not persist with its efforts to ensure free primary medical care. Peter Fraser and Walter Nash overruled Arnold Nordmeyer in refusing to prevent doctors charging a fee over and above the state payment for seeing a patient. That had long term repercussions for the affordability of primary medical care in New Zealand.

Over time the state failed to increase its expenditure on the General Medical Services Benefit in line with increases in doctors' charges. The benefit came to constitute a smaller and smaller part of the total price of a consultation. In 1991 the last government removed the universal nature of the benefit and replaced it with means tested payments through the mechanism of the Community Services Card. Reforming this unsatisfactory system is one of the key health policy issues our government is working on now.

In other respects too we find ourselves dealing with health issues similar in nature to those confronted by our forebears elected in the 1930s. The great depression impoverished many New Zealanders. Poverty and unemployment make for poor health. The first Labour Government tackled both on a broad front. It successfully promoted full employment, educational opportunity and social security. Throughout its fourteen years in office and for long after, New Zealanders experienced more social security than they had ever known, with beneficial effects for health status.

Economic security, however, proved elusive. The early fifties were relatively good years, with export revenues fuelled by the wool prices boom which accompanied the Korean War. Korea has exceptionally cold winters, and the United Nations soldiers, including New Zealanders, needed all the woollen clothes they could get.

The good times were not to last. On the day that Mr Nordmeyer became the Minister of Finance in 1957, Treasury reported to him that export prices had fallen heavily while imports were running well ahead of the previous year. Mr Nordmeyer's first Budget set out to deal decisively with the balance of payments crisis, and was labelled the "black Budget" for its pains. Economic upsets, often caused by our dependence on commodity exports and the vagaries of their trade, were to recur again.

In 1967 the economy was hit hard by the downturn in wool prices. In the early seventies, Britain entered the European Economic Community and could no longer import the same quantities of our farm produce. In 1974 the price of oil rose sharply, putting huge pressure on our ability to pay our way. Rapid deregulation between 1984 and 1987 produced an economic bubble, which burst in late 1987 after the crash of stocks on Wall Street. Since then, as before, ours has been a stop-go economy as we have ridden the commodity cycle and experienced its highs and lows. The Asian economic crisis of 1997/98 also left its mark.

The reaction to economic crisis in the 1980s brought the introduction of neo-liberal economic policies. In a short space of time New Zealand went from being one of the OECD's most protected and regulated economies to being one of the least.

Unfortunately adequate policies were put in place to support the redeployment and upskilling of displaced workforces, nor to facilitate the emergence of sunrise industries. It is only now that priority is being given to that. To add insult to injury, the 1990s saw far-reaching changes in social and labour market policy which removed the cushion they had provided against the effects of major economic dislocation. In those changes:

„h The Employment Contracts Act 1991 limited the bargaining power of workers, leading to the creation of a secondary labour market of the less skilled and un-unionised, who saw little movement in their incomes in the 1990s.

„h Public housing rentals were applied at market levels. The accommodation supplement did not make up the loss for low income households in state houses, and many were impoverished.

„h Social security benefits were cut significantly in 1991. The age of eligibility for New Zealand Superannuation rose rapidly in the 1990s, disrupting retirement plans for many, and Superannuation itself was more harshly surcharged from 1991. In 1998 the last government made a decision to cut Superannuation further, and that policy took effect in 1999.

„h Unemployment reached double digits in percentage terms in the early 1990s.

These far-reaching changes radically reduced living standards for lower income people and had an impact on health status. Many more New Zealanders were quite simply not only poorer, but also living in poverty. These were the years when the foodbanks became an essential social service, when teachers doubled their responsibilities as de facto social workers, and when the spread of poverty took its toll on health status, with especially noticeable effects on children.

The increase in dental disease and the rising incidence of infectious diseases like meningococcal meningitis were signs of the problem.

Faced with the health fallout of far-reaching change like this, the health system cannot produce miracles. The system itself had also been subjected to massive change, which in opposition we labelled as a process of Americanisation. Eventually more resources seemed to be devoured by a business model for worse health results.

Over the years in opposition Labour planned a return to a collaborative health system with community participation built into decision-making again. The vision was for a system with clear health goals and a commitment to equity of access and to lifting health status. The vision was based on the WHO's strategy of health for all by the year 2000.

Unfortunately the year 2000 came and went, without New Zealand having made great strides in earlier years towards the goal, but nonetheless the WHO's approach to primary health care remains highly relevant. That approach suggests that primary health care cannot be fully effective in the absence of access to good education, decent housing, adequate income, employment, a healthy environment and in the absence of peace and stability.

In the New Zealand context, it is also important to add treaty and cultural dimensions, acknowledging the importance of all peoples in New Zealand being able to stand tall in our society.

This approach enables us to see health care and policy in its broader context. My own background and continuing interest in health issues leads me to look at policy and progress overall from a health perspective. I believe that if we are addressing the sources of socio-economic inequity generally, then we will have an impact on health inequities. As well, I believe there are important interventions which the health system itself can make.

The government has taken a number of steps to address the broader economic and social inequities. It is true that resources are constrained, but we prefer to focus on what we can do, rather than on what we can't. We have endeavoured to lift living standards for low income earners through a variety of means and to increase the resources for education and health care initiatives in low income communities.

For example, minimum wage levels have had two annual adjustments in the past nineteen months and have been significantly improved, especially for young people. The Employment Relations Act has replaced the Employment Contracts Act in order to give a more level playing field for wage bargaining and also to encourage better relationships between workers and employers.

The level of New Zealand Superannuation was raised in April 2000 to restore older people's living standards. We reversed the cuts announced in 1998, which if they had been allowed to have their full impact would have seen from a third to half of older citizens fall under the poverty line. By bringing the Superannuation level back up to what was agreed in the 1993 Accord, and previously, as adequate to enable older people to live in dignity, we hope to see positive health impacts.

We are now focused on, the longer term plan to secure superannuation. Our view is that if we save now as a nation, we can save New Zealand Superannuation for the future and prevent elder poverty. I expect the legislation setting up the new fund for Superannuation to go through Parliament in the coming months.

Income-related rentals for state houses were reintroduced from 1 December 1999, with an average decrease across tenants of around $33 per week. That figure is far higher in high priced housing markets like the one I represent in the central suburbs of Auckland. In the 1990s state tenants in my electorate often told me that they could not afford to continue to live in traditional state house suburbs like Mt Roskill and Sandringham.

The move back to income-related rentals has given more discretionary income to lower income households, taking the pressure off paying the essential bills for electricity, food costs, clothing and health care.

The latest analysis from New Zealand Council of Christian Social Services on foodbank usage states that already in the first three months of this year there were fewer state house tenant households among their clients, and there was a decrease in the proportion of applicants for food parcels paying more than fifty percent of their income on housing costs.

We have also been mindful of the need to join up housing and health policy. A programme is under way in Otara, Mangere, and Onehunga to relieve overcrowding in state houses, and to upgrade state houses so that they are warmer and better to live in.

Another component of the programme has housing tenancy workers going on a short course organised by public health officials, to help them identify signs of serious illness like meningococcal meningitis.

There is a heart-warming story about the day Otara tenancy workers took this course. One tenancy worker later went to visit her neighbour, and noticed that the neighbour's baby had symptoms very much like what she had been briefed on earlier that day. She urged that the baby get medical attention. The report I had was that if they had not got medical attention within two hours, the baby may well not have survived, or had its health status very severely compromised.

It is interesting how what can look like small initiatives, such as the housing tenancy workers being better linked into public health strategies, can have a very significant health impact.

In education policy, the government has also had a strong equity focus. We are mindful that adequate, effective education is a precondition for effective primary health care.

In early childhood education we have introduced equity funding for the first time. We have been targeting the participation rates for Maori and Pacific Island children in early childhood education to endeavour to bring those rates up. There have also been scholarships established for Maori and Pacific people to train, both in early childhood education and in teaching generally.

In schools, the abolition of bulk funding freed up a substantial amount of funding for reallocation to schools. The reallocation formula is weighted to low decile schools.

There have been a number of initiatives to improve the responsiveness of the school system to Maori and Pacific people, along with initiatives to ensure that digital opportunity is available in low-decile neighbourhoods.

At the tertiary level our equity focus has seen us reducing the costs of study, by improving the loan system and freezing tertiary fees.

At 5.4 per cent, unemployment is at its lowest level in thirteen years, and can go lower. Our overall economic strategy has at its end point the creation of a more prosperous society which is inclusive, healthier, and lifts living standards.

Many initiatives have been undertaken in health policy in the last nineteen months. The year 2000 saw the passage of new legislation setting up the district health board framework. The boards are charged with working holistically to improve the health status of their communities, to work collaboratively with stakeholders, and to provide effective services. While we expect the boards to be businesslike in the way they operate, they are not primarily businesses. Rather we see them as public services, aiming to do the best they possibly can with the resources available.

The theme of reducing inequalities runs through the New Zealand Health Strategy we released last year. Other strategies are emerging, or have emerged. We have had the primary health care strategy in February, the strategy for palliative care, and I understand the Maori health strategy is out for consultation. Goals and objectives are being set for a Pacific peoples' health strategy, and the sexual and reproductive health strategy is planned for release in August.

The New Zealand Disabilities Strategy has tremendous support from the disabilities sector, and was developed in close collaboration with that sector.

In our first Budget we sought to take the pressure off waiting times for elective surgery, and provided more funding aimed at securing about 27,000 extra operations. The aim of funding levels this year is to maintain waiting times at that new lower level. We have not funded hospitals to make further reductions because funding pressures and needs are also present elsewhere.

We have made a huge commitment over a four-year period from 2000 to implement the Mental Health Commission's blueprint for services. I am optimistic that at the end of the four years we will see the mental heath service in better shape than we have ever seen it before in New Zealand.

Over the coming year, as the Health Minister has signalled, the focus needs to be on developments around the primary health care strategy. The strategy generally has been well received. It proposes establishing Primary Health Organisations and through them to bring much more community participation to the planning and co-ordination of primary services.

New Zealand is one of the few OECD countries where people are paying significant fees for primary medical care. This is the long term consequence of the First Labour Government's unfinished business in health care. Over time, New Zealand just did not budget enough to maintain effective universal primary medical care subsidies, and eventually their universal character was dropped. The public purse now pays less than forty per cent of the cost of GP consultations across the whole country. The majority of adults pay full cost, and even those entitled to subsidies are paying over half to two-thirds of the cost of the average consultation fee. That creates barriers to timely access, and eventually creates more demand for hospital services than there need be.

The big challenge is how to improve the funding. Improvements are likely to have to be phased in. They will be expensive. Needless to say, with our ambition to improve services in health, as elsewhere, you would not expect personal income tax cuts to be a priority for our government.

A big change from the time of Nordmeyer's involvement in health policy is the recognition that mainstream services do not meet the needs of all groups in the population well. These days, the government is very keen to support the development of Maori primary health care provision and co-ordination. I know from my round of community visits that networks of Maori health planners, strategists, and providers are well established and many are exceptionally sophisticated and well organised.

We all know that Maori have significantly lower health status than other New Zealanders. Relevant population-based primary health care together with employment, housing, and education initiatives can change that. The government sees itself as a partner with Maori organisations working for change in those areas.

What we are endeavouring to encourage from the bureaucracy, across sectors, is an approach to communities which, rather than saying "Have we got a great programme for you", asks "What strategies do you have for the development of services for your community and what role can your community based organisations play in delivering those services".

My strong belief is that we can enable people to make the choices which support better health. As Minister of Health I launched ten New Zealand health goals. Now there are thirteen, in the New Zealand Health Strategy.

Reducing tobacco consumption is a top priority in those goals. We believe that a combination of good smokefree legislation, significant taxation levels, a health promotion approach, and other initiatives will make a big difference to smoking rates.

New Zealand has made more progress in reducing smoking over the years than have many other countries. In a report released a couple of days ago there are figures, based on 1999 comparisons, showing that New Zealand men have the second lowest smoking prevalence rates in the world. I am afraid my own gender only comes in at thirteenth lowest for women. Smoking poses a very high threat to the health status of Maoridom.

Two days ago I launched a new campaign to reduce Maori smoking rates. This campaign is designed by Maori for Maori. Entitled "Its About Whanau", it appeals to the Maori strong sense of family in urging smoking cessation. The messages are clear: stop smoking so you will see your mokopuna grow up, or because you want to be there for your children. I believe these messages will have a big impact.

An early evaluation of recent initiatives to provide nicotine replacement therapy through the Quit Line has been done. The evaluation after three months showed that 44 per cent of those surveyed who had rung the Quit Line since the nicotine replacement therapy was available through it are ¡V to use the official phrase - 'currently quit'. That compared with twenty per cent of those who had rung Quit Line prior to the availability of the nicotine replacement therapy being "currently quit".

Nineteen per cent of those surveyed who were on the patches and gum programme had been completely quit for the three months. A survey of those who had used Quit Line before the nicotine replacement therapy was available found that only seven per cent were completely quit after six months.

These results look encouraging. Certainly one of the big changes in the approach to smokefree policy since I was Minister of Health has been the new emphasis on cessation, in contrast with the prevention focus of the 1980s and 1990s. Prevention remains very important, but obviously cessation has a big role to play too.

The Quit Line/nicotine replacement therapy programme appears to be reaching lower socio-economic groups. Only 25 per cent of those accessing patches and/or gum were in full-time paid employment or were self employed, compared to 45 per cent of the population which falls into those categories. That is an encouraging result.

Immunisation is another priority area for action. Extra resources were made available for immunisation for the 2000/01 financial year. A catch-up campaign is underway to prevent measles, and its two cousins, mumps and rubella.

I understand that the Health Minister has committed to the development of the national registration for immunisation. Work is ongoing on procuring a meningococcal meningitis vaccine. It will be expensive.

With population-based approaches across areas like immunisation, tobacco, better nutrition, early detection of cancers, and alcohol abuse, we can make a real difference in enabling people to make choices for better health. That is certainly a very high priority for me.

Our government knows that there are significant health inequities. We know who is most disadvantaged by those inequities. We know that the health system can play an important role in tackling them. The health system however, can not reduce health inequities on its own. Housing policy, education policy, employment policy, and economic policy all must be synchronised with health policy to reduce health inequities.

Last week I spent three days at the Knowledge Wave Conference in Auckland where more than 400 New Zealanders gathered to discuss how to modernise New Zealand's economy and improve our economic security and living standards. Social inclusion was also a strong theme. In the 21st century, catching the knowledge wave can aim to achieve for the economy what the guaranteed dairy price and high tariffs tried to secure in Arnold Nordmeyer's time. The objective is to find the means to fund the decent society for all New Zealanders. The government of which Sir Arnold was part found solutions which worked in their time. Our job is to find a new balance appropriate to the 21st century which secures health and other services of quality and provides long term economic and social security.


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