Health budget needs $500 million in new money to avoid cuts

Vote Health will need to increase by $499 million in this year’s Budget just to maintain the current levels of service. This is one of the key findings of a pre-Budget analysis of government health expenditure prepared by the New Zealand Council of Trade Unions and released today.

“We estimate that to avoid cuts in services or increased user charges, the Health Vote would need to increase by at least $499 million just to keep pace with population growth, ageing, and increases in costs,” says CTU economist Bill Rosenberg.

“To allow a reasonable amount for new treatments and services, a further $172 million would be needed, so the total required would be $670 million.”
“Last year Health received approximately $298 million in new money. Unless the increase in the Budget this week is an improvement on that, the shortfall will be at least $200 million,” says Bill Rosenberg.

The analysis also shows that District Health Boards (DHBs) need $399 million just to cover costs, ageing and population pressures, or $536 million to provide for new treatments and services.
“Given that there has been a substantial shortfall over the last four years we have been tracking the Health Vote, any further shortfall will see more deterioration in services or increased user charges,” says Bill Rosenberg.”

“The CTU and its affiliated health sector unions have made this estimate so that we and the public can judge whether the Health Vote announced in the Budget on 15 May provides for improved health services, or is really a cut in those services, or a standstill.”

“Our estimates over the last two years have underestimated the needs of Vote Health compared to the Ministry’s estimates,” said Bill Rosenberg.

Note

A working paper and spreadsheet providing details of the analysis are available at the following locations:

http://union.org.nz/sites/union.org.nz/files/How-much-funding-is-needed-to-avoid-the-condition-of-the-Health-System-worsening-2014_0.pdf

http://union.org.nz/sites/union.org.nz/files/Health-Vote-2014-15-pre-Budget_0.xlsx

Previous Vote Health Budget analyses can be found at http://union.org.nz/health-working-papers
 

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