Government's health boost less than claimed, expert says
Nicola Willis and Simeon Brown at Wellington Hospital on Wednesday.
Photo:
RNZ / Samuel Rillstone
A leading health systems expert is questioning the Government's claim of "record investment" in the public system, saying the real increase to the health budget this year is half of what the government claims.
Health Minister Simeon Brown and Finance Minister Nicola Willis have said the $31 billion allocation for health in Budget 2025 represented an operating funding increase of 7.4 percent - or nearly $2 billion - year on year.
The two ministers donned hard hats and high-vis vests for a site visit at Wellington Regional Hospital on Wednesday, where they announced details of a further $100 million investment in its ongoing upgrade.
Speaking to media following the tour, Brown said Health NZ had also had a $1.4 billion uplift in operating funding this year - the second instalment of a $16.6 billion cost-pressure boost over four years.
"It's a significant uplift to allow them to invest in the front-line workforce required to give New Zealanders and timely and quality healthcare they need," Brown said.
The government's investment in health far outstripped either population growth or inflation, the Finance Minister added.
"For context, that operational funding uplift was more than 7 percent over what it's been, which even on a population basis is more than 6 percent," Willis said.
"So, we're ensuring that funding is going in at a far faster rate than either population growth or inflation."
In response to RNZ's request for a detailed breakdown of the percentage increase, Brown's office later said the figure of 6.2 percent was "based on Treasury's annual growth rates set out in Budget Economic and Fiscal Update 2025, and the nominal Vote Health operating spend for Budget 2025".
Nicola Willis and Simeon Brown at Wellington Hospital.
Photo:
RNZ / Samuel Rillstone
However, Auckland University health policy Professor Tim Tenbensel said, according to his calculations, the $31 billion allocated for health in the Budget was only 3.6 percent more than what was actually spent last year.
"So, we're pretty much treading water at best, or rather sinking a little, in this budget," Prof Tenbensel said.
Furthermore, operational funding last year only increased about 1.2 percent in real terms.
"And the reason for that is because a lot of the money for this financial year's Budget in health was soaked up to remediate the underpayment of staff under the Holidays Act," he said.
"So, that might help to explain the reality of people in the sector wasn't matching some of the things said by government."
Tenbensel said the Government's oft-quoted claim of a $16 billion boost to Health NZ's bottom-line was "a bit like your boss giving you a $3000 payrise each year for four years and then claiming your pay has gone up by $30,000 over that time, not $12,000".
The trick was to keep adding on the previous year's increase as "new money", ignoring the fact that it would have been eaten up by inflation.
"It's a very creative ploy that one, so I think we need to see it for what it is," he said.
"All governments do this sort of thing, but in the scheme of things, this one is pretty brazen."
Dumping pay equity claims, including for primary care nurses, saved the Government about $420 million in health, which mostly paid for the near $500 million investment in digital health, after hours and urgent care in the Budget, he said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
RNZ News
20 minutes ago
- RNZ News
Money in transaction accounts costing New Zealanders billions
Experts are reminding New Zealanders to consider whether cash they have stored in the bank could be be earning them interest. Photo: 123RF New Zealanders may be leaving money on the table by keeping their cash in transaction accounts. David Cunningham, chief executive of mortgage broking firm Squirrel, said there was significantly more money in transaction accounts now than before Covid. Most banks do not pay interest on transaction accounts. Cunningham said transaction account balances had peaked at $53 billion when interest rates were close to zero, and people could see little reason to change. It had fallen to a recent low of $37b but had now lifted again to $39b. "Almost all of this earns 0 percent [interest]." If that money was shifted into an account paying 3 percent, it would give savers just under $1.2 billion in interest a year. Cunningham said before Covid hit, there was about $28 billion in transaction accounts. "You're always going to need some float in your transaction accounts but a lot of this is lazy money." He said it was customer inertia that also delivered higher profits to the banks, because they could make money from the cash sitting in the accounts. But he said banks should be encouraging customers to check that they had their money in the right accounts. "Every time you log in they could remind you that you've got say $20,000 in a transaction account earning nothing and if you moved it to savings you could earn x… that would be a way to make sure people were better off," Cunningham said. Claire Matthews, a banking expert from Massey University, said some people kept their money in transaction accounts because of the ease of access. "They may have concerns about fees to access it if it's in a savings account. Partly I think it's because they don't think the interest will be worth it - but they may not have actually looked at the numbers, because depending on the amount it may be very worthwhile over time. Partly, however, it is probably just not getting around to doing it." Banks have been cutting rates for term deposits and some savings this week, after the official cash rate reduction . Westpac said on Thursday it was cutting the rate offered on a number of term deposits by 10 basis points. ASB said it was cutting the rate offered on its Savings On Call, ASB Cash Fund, Savings Plus and Headstart accounts by 20 basis points. That took the Headstart rate to 2.7 percent. Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
20 minutes ago
- RNZ News
Social media spat: Blues and Moana beef online after play-off spots are set
Rieko Ioane and the Blues social media team were busy post match. Photo: Blake Armstrong /ActionPress Analysis - It's fair to say that the while the final regular season round was primed to throw a cat amongst the pigeons, it ended up being more a showcase of ruthlessness. Friday night saw the Chiefs have no mercy, the Blues gave their most complete performance of the year to set up their play-off chance, which was confirmed by a now scarily impressive Hurricanes side. All of this came at the expense of the Highlanders' pride, the Waratahs' hopes and both of those plus some social media credibility for Moana Pasifika. Referee James Doleman. Photo: Mark Evans/ActionPress It's worth pointing out up front the Crusaders were fortunate in their they certainly put in enough tough defence to deserve their 33-31 win over the Brumbies . But plenty of scrutiny has come in following the officiating crew missing a pretty clear knock on from Sevu Reece in the lead up to George Bell's match winning try. It says a lot about rugby's issues that since the ref got it wrong, the TMO was right in the end for not referring back to it after Bell's try since the ball had been in touch since. It also isn't a great look that the entire refereeing crew were New Zealanders, despite the game taking place in Canberra. The Blues' social media posts elicited a strong response from Ardie Savea. Photo: Instagram While the Blues' performance in their 46-6 win over the Waratahs was about as close as they've come to last year's campaign, the reward they get is a trip down the road to face the Chiefs. It's pretty easy to think the Blues have simply put off their holidays for a week, given that no team outside the regular season-ending top four has ever won any iteration of Super Rugby. But it's also worth remembering the last time they played in Hamilton, because that was the closest by far anyone's come to beating the Chiefs at home this season. However, the fact that Rieko Ioane scored a hat trick meant that we didn't have to wait long for him to jump on Instagram , where he shared a post noting that he's now equal first on the Blues all time try scoring list. On it was the not so subtle message that he's 'Heard the noise…Whatcha sayin?'. Just to make it even more spicy, the Blues closed out their online beef with Moana Pasifika (for now) by getting a last and no doubt very satisfying laugh. However, that didn't stop Moana captain Ardie Savea throwing a bit of passive-aggressive shade back at them, which drew a number of responses from Blues players and All Black teammates. Moana Pasifika. Photo: Andy Radka/ActionPress Moana's win over the Blues a fortnight ago was hailed as the performance of the season, given its historic nature and Ardie Savea's superhuman effort on the field from start to finish. But the virtual tickertape parade was jumping the gun a bit - in the two games since, they've conceded 149 points, were bounced from the play-offs by a Hurricanes team hell bent on revenge and suffered the aforementioned social media butthurt. Did Moana dine out a bit much on their success and suffer a bit? It certainly appears so, while neither team wanted to admit it up front, there was some serious feeling in the Blues fixture on and off the field. Perhaps Moana felt like the point they needed to prove this year was achieved that night. If so, then that's a pretty harsh lesson they've just learned because the losses to the Chiefs and Hurricanes rank among the worst in a short history that includes plenty of hidings. Raymond Tuputupu of the Hurricanes celebrates his try. Photo: Elias Rodriguez / Their inclement form in the first half of the season has meant that the Canes have flown under the radar a bit, but now nothing can hide the fact that they've won their last five games in a row. That's more than anyone else and while they have to travel to face the Brumbies in Canberra next weekend, they won there four weeks ago. Don't say it too loud but it's all starting to feel quite similar to 2016, when an unheralded group under a second year coach managed to overcome a rough start to the year to go on and win the whole thing.
Scoop
6 hours ago
- Scoop
Worsening Poverty And Social Misery In New Zealand
Press Release – Socialist Equality Group The government is seeking to solve the worsening economic crisis by ramping up the exploitation of the working class, while protecting the fortunes of the super-rich. Last week New Zealand's Treasury released a Child Poverty Report, which forecast that the proportion of children living in poverty will increase from 17.7 percent in 2024 to 18.4 percent in 2029. The report was released along with the National Party-led government's austerity budget, which starves public services, while cutting workers' wages, reducing government contributions to retirement savings and barring thousands of unemployed teenagers from welfare. The government is seeking to solve the worsening economic crisis by ramping up the exploitation of the working class, while protecting the fortunes of the super-rich. Asked by a TVNZ interviewer why the government had not done more in the budget to address child poverty, Finance Minister Nicola Willis declared: 'there is not actually a magic money tree that allows me to show such generosity that I can solve every problem at once.' Year after year, successive Labour and National Party governments have trotted out this refrain, even as they have handed tens of billions of dollars to the corporate elite through tax cuts, subsidies and bailouts, and spent billions on the armed forces. The National-led coalition government—with the support of the opposition Labour Party—will spend an extra $13 billion over the next four years as part of its plan to double the size of the military and integrate New Zealand further into US-led imperialist wars. Sarita Divis of the Child Poverty Action Group, a non-government organisation, pointed out in a New Zealand Herald column last month that the $3 billion annual increase in defence spending is exactly what the Treasury itself estimated it would cost to halve the level of child poverty by 2028. The government's Child Poverty Report actually understates the extent of child poverty. Its data is more than a year old, covering the period from July 2023 to June 2024. Over the past year, the number of people in full-time work has fallen by 45,000 as unemployment increased from 4 to 5.1 percent, and living costs have continued to rise while wages stagnated. Moreover, the government defines poverty as less than 50 percent of the median household income after paying for housing costs—an extremely low bar. While the percentage of children below this poverty line was unchanged in the year to June 2024, the number of children living in 'material hardship'—the poorest of the poor—increased by almost a third between 2022 and mid-2024, from 10.5 percent to 13.4 percent. 'Material hardship' is defined as lacking access to six or more 'essentials,' such as decent housing, heating, healthy food, warm clothes and shoes, etc. Another survey, by the Ministry of Health, found that last year 27 percent of children 'lived in households where food ran out often or sometimes,' up from 21 percent the year before. Numerous reports illustrate an increasingly severe social crisis. The Christchurch Press wrote on May 22: 'Some families have moved into one heated room to keep warm, while others are taking out loans to pay their power bills as costs rise and temperatures drop.' It noted that last year, 'Consumer NZ estimated 140,000 households had to take out a loan to pay their power bill, and a further 38,000 households had their power cut at least once as they couldn't pay their bill.' In Wellington, the Post reported on May 10 that 'Food charities are facing an unprecedented surge in demand from struggling middle income earners.' In February, one soup kitchen 'served 7930 meals, 1200 more than across the same month in 2024.' Nationwide 500,000 people, one tenth of the population, relies on food banks on a regular basis. Homelessness continues to become more visible in every major centre. The government has boasted about reducing the number of emergency housing places from 4,000 in September 2023 to around 500 in December 2024—despite the 2023 census finding that 112,496 people, or 2.3 percent of the population, are 'severely housing deprived' (up from 99,462 people in 2018). According to government data cited by the Press, 'the number of emergency housing special needs grants, which fund temporary accommodation for people in need, have dropped from 8873 in July 2023, to just 1338 in March 2025.' Growing social misery and hopelessness is reflected in an unprecedented surge in the use of dangerous drugs. In Northland, the poorest region, as well as Southland and Otago, wastewater testing shows methamphetamine use has tripled in the past year. Nationwide, the amount of meth consumed between October and December 2024 was 78 percent higher than the average over the previous 12 months. There is also a profound mental health crisis, particularly affecting young people. A May 14 report by UNICEF revealed that New Zealand had the worst youth suicide rate of the 36 countries in the OECD, with 17.1 suicides per 100,000 people aged 15 to 19 (based on data from 2018–20). UNICEF appealed to the government to increase welfare payments for families with children and to address food insecurity by expanding the provision of free school lunches. The government has made cruel cuts in both areas. The government has deflected blame for young people's poor mental health onto social media. It is seeking to ban under-16-year-olds from social media platforms. This has nothing to do with protecting children but is aimed at strengthening state control over the internet and stopping teenagers from accessing political material, especially socialist articles explaining the real causes of inequality, poverty and war. While the Labour Party has criticised the latest budget cuts, this is entirely hypocritical. Homelessness, child poverty and the cost of living all became worse during the 2017–2023 Labour government, which is why it lost the 2023 election in a landslide. Labour transferred tens of billions of dollars to the super-rich through corporate bailouts, subsidies and quantitative easing measures during the first year of the COVID-19 pandemic. Last year's National Business Review Rich List, profiling more than 100 of the country's richest individuals and families, showed that their collective wealth increased from $72.59 billion to $95.68 billion in just one year. More than half of this figure, over $50 billion, was held by just 10 billionaires. This enormous wealth, accumulated by exploiting the labour of working people, must be expropriated, along with the money being wasted on war, so that it can be used to eliminate poverty, expand schools and hospitals and meet all other social needs. The task facing workers and young people is to reject all capitalist parties, including Labour and the Greens, and the union bureaucracy which has suppressed any resistance from workers to the government's attacks, and to take up the fight for the socialist reorganisation of society. By Tom Peters, Socialist Equality Group 30 May 2025
