2019 Health Budget Analysis – Has Government Budgeted enough for health of New Zealanders?

CTUEconomist and Director of Policy Dr Bill Rosenberg along with LyndonKeene, Director of Policy and Research at the Association ofSalaried Medical Specialists (ASMS) have completed their detailed line by lineanalysis of the Governments 2019 health budget.

Rosenbergand Keene’s research in the lead up tothe Budget estimating what funding was needed to maintainthe same level of service as the previous year can be viewed here http://www.union.org.nz/wp-content/uploads/2019/05/How-much-funding-is-needed-to-avoid-the-condition-of-the-Health-System-worsening-2019.pdf

“Insummary, the Government has not budgeted enough. We have estimated that thereis a shortfall of $134 million. There is not enough money in the 2019 Budgetfor the Government to fund the new services they have announced, increasingcosts, population growth and the effects of an ageing population, when comparedto the 2018 Budget,” Rosenberg said.

“Wewelcome the boost given to primary mental health services, which have beenneglected for far too long, costing people’s lives. However the new funding tothe Health system will start slowly this year and we estimate that the existingDHB ring-fence d funding for specialist mental health services for peoplefacing the most severe challenges received $55 million less than what it neededto cover cost increases, pay settlements and population growth. We areconcerned that the services for people with severe mental health needs willcontinue to be under-resourced and we will continue to see crises within thesespecialist units at the cost of both people with severe needs and the staff whohave to cope with insufficient resources to meet these demands,” Rosenbergsaid.


· TheHealth vote operational funding in the 2019 Budget is an estimated $134 millionbehind what is needed to cover announced new services, increasing costs,population growth and the effects of an ageing population, compared to the 2018Budget.

· DistrictHealth Boards (DHBs) received an estimated $139 million less than they need tocover increased costs and demographic changes during the year, and to fund newservices.

· Weestimate an accumulated funding shortfall in annual spending power of $1.6billion between the 2009/10 and 2019/20 financial years. It means that in thenext Budget the Government will need to find over $2.5 billion extra for2020/21 if it wishes to restore the value of funding to the 2009/10 levels.

· HealthVote operational expenses are forecast to remain static as a proportion ofGross Domestic Product (GDP) compared to last year, at 5.73 percent of GDP. Ifit had maintained the proportion of GDP it had in 2009/10, it would be $1.7billion higher in 2019/20.

· Centrallymanaged national services such as National Disability Support Services,National Maternity Services and Public Health services together received $4million less than what they needed to cover cost increases and demographicchanges and to fund new services.

· NationalMental Health Services received $73 million additional funding compared to the2018 Budget, but DHB ring-fenced funding for specialist mental health servicesreceived $55 million less than what it needed to cover cost increases, paysettlements and population growth.

· TheMinistry of Health was underfunded by $2.3 million and has had significantreductions in staff numbers since 2010.

· Thepay equity settlement for care and support workers was funded $414 million,this year including Mental Health and Addiction Support Workers ($36 million)following their inclusion, agreed in 2018.

· Capitalfunding announced was $1,713 million, $460 million more than was announced in lastyear’s Budget, which in turn was almost double the amount announced in 2017.

The full report can be found here http://www.union.org.nz/wp-content/uploads/2019/08/Did-the-Budget-provide-enough-for-Health-2019.pdf

The Excel spreadsheet is here http://www.union.org.nz/wp-content/uploads/2019/08/Health-vote-2019-post-Budget.xlsx

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