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Billion-dollar Health Spend Risks Disappearing In The Black Hole

The New Zealand Taxpayers’ Union is warning that Labour’s $1 billion health policy could turn into unproductive black hole spending unless efficiencies are found.

Taxpayers’ Union spokesman Louis Houlbrooke says, “In 2019’s Wellbeing Budget, the Government announced an $823 million increase in funding for mental health services. At the time, we warned that this could turn into ‘black hole spending’, with ever more taxpayer funds being thrown at mental health problems, regardless of the services’ performance.”

“Now, our warning appears to have borne out as Labour announces an additional $151 spend on mental health services in schools.”

“Politicians think taxpayers have short memories – we’re expected to cheer big funding packages for mental health, then forget about it so the Government can make the same costly announcement a few short years later.”

“Was the initial spend not successful? Was it targeted at the wrong people? These questions go unaddressed in Labour’s policy.”

“Political parties campaigning on even bigger health budgets must also identify reforms to deliver better returns for every dollar the taxpayer spends. That’s the message of our research papers on productivity in the health sector, released last year.”

The Taxpayers' Union's key findings were:

  • Health spending is expected to grow from 6.2% of GDP in 2016 to 9.7% of GDP by 2060, contributing to debt hitting 205.8% of GDP by 2060.
  • Between 2004 and 2015, there was zero cumulative growth in healthcare productivity.
  • Between 1996 and 2017, labour health productivity growth (0.9% per annum) ran at half the rate of the rest of the economy (1.8% per annum).

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