GUEST BLOG: Ian Powell – A devastating critique; but there’s always a but!

I became the Executive Director of the Association of Salaried Medical Specialists (ASMS) in April 1989, a couple of weeks after its formation as the second registered union of doctors in Aotearoa New Zealand.

The first registered doctors union was the Resident Doctors Association (RDA) representing ‘doctors-in-training’ known as resident or junior doctors; specifically house officers and registrars (ASMS’s future members).

ASMS affiliated to Council of Trade Unions in its second year

I was keen that ASMS affiliated to the Council of Trade Unions (CTU). The following year we did so; the first doctors union to affiliate to a peak union body.

For its own reasons the RDA did not affiliate and today faces the divisive challenge of competing unions for the same members; an employers’ delight ironically actively encouraged by the current CTU president. Resident doctor unionism was predictably weakened as a direct consequence.

A proud achievement

At the time I was proud of what I considered to be a major achievement. Notwithstanding the above paragraph, I still am. The affiliation decision was based on common sense pragmatic rather than ideological grounds.

It made good sense for the union of senior doctors and dentists to be in the peak body that included other unions representing the large majority of the rest of the employed health workforce, particularly as we would be an independent affiliate, not a branch.

At that time I anticipated that I would only work for ASMS for about five or so years given the pattern of my previous employment which was in education.

Had this been the case CTU affiliation would have been one of my crowning achievements. However, I miscalculated badly (time-wise that is)!

Strengths of the CTU

While the strength of the CTU rested with its ‘broad church’ of affiliates, its greatest profile came from the high calibre and stature of its presidents, in particular, Ken Douglas, Ross Wilson and Helen Kelly.

CTU’s strength rests primarily with its affiliates but good leadership profile also helps

This profile helped maintain ASMS’s affiliation. But there was another group of CTU national officers who reinforced this positive profile; its economists who also led the CTU’s policy work.

From Peter Harris to Peter Conway to Bill Rosenberg they were all articulate, credible and high calibre. All three also spoke at ASMS annual conferences. And now Craig Renney is ably continuing this standard of quality work.

During the last decade of my time with ASMS the CTU began publishing separate economic analyses of Vote Health.

These publications provided invaluable empirical insights into what was really happening in health funding under successive governments. Some publications were, in fact, joint collaborative CTU-ASMS collaborations.

A must-read Substack critique of Government announcement

Recently Craig Renney has taken the profile of his economic analyses to a higher level by publishing on Substack. I highly recommend to readers that you follow his writings. Continuing the quality of his above-mentioned predecessors, he is insightful, considered and readable.

Later the same day he published a devastating critique of new Health Minister Simeon Brown’s major health announcement on 7 March under the heading Not in rude health – just  rude:

(2) Not in rude health – just rude – Craig Renney

CTU economist Craig Renney is continuing the quality standard of his predecessors

Renney’s post is angry but his anger is both justified (including Brown’s use of personal attacks) and controlled. He is both measured and evidence-based; sarcasm is present but as an add-on, not a thematic driver.

Exposing funding misrepresentation

He uses Treasury data to reveal that that operational health funding per person in the 2024-25 budget fell 4.5% in real terms from the 2023-24 financial year.

Health economist Peter Huskinson drew an earlier similar conclusion to Renney’s

He is not a lone voice on underfunding. On 29 July 2024 I reported an analysis by health economist Peter Huskinson:

https://newsroom.co.nz/2024/07/26/all-powerful-levy-is-feudal-baron-of-a-28b-fiefdom/

Huskinson calculated spending on total health on a per person basis. Below is my summary of his conclusion:

Controlling for inflation and population, the per-person spend grew on average 4.7 percent per year during the Helen Clark Labour-led government (1999-2008), 1.3 percent during the John Key-Bill English National-led government (2008-17), and then 4.6 percent over the last Labour-led government (2017-23). He projects a reduction of 3 percent under this Budget.

Huskinson concluded, as reported by NZ Doctor, that the current government’s spending on health has declined and is actually “well below anything achieved this century in New Zealand or comparable countries.”

Renney does not hold back. In response to the Government’s claim of a record investment in health of $16.68 billion, he counters that every year is a record year as long as the increase is at least $1 (not to split hairs but this would also be the case if the increase was one cent).

His counter includes that the $16.68 billion is the funding increase over six years rather than the occasionally sound-bite implied one year.

Further, the economist considers more than counting the money going in; he also counts where the is money going out. This leads to him identifying that the total available operational spending (as distinct from major capital works) rose by just $93 million (a massive 0.35%).

Rest of Renney critique

The rest of Craig Renney’s critique includes covering government claims on medical and nursing workforce recruitment, the promised new digital telehealth service, and the bowel screening changes.

There is much to respect in his critique of the ideologically based government intention to outsource elective (non-acute) surgery to private hospitals.

I critiqued the serious implications of this intention in my latest Newsroom column (12 March). Essentially I argued that this form of privatisation is both dependent on and intended to perpetuate the deliberate rundown of public hospitals:

https://newsroom.co.nz/2025/03/12/browns-health-overhaul-puts-system-at-increased-risk/

In Craig Renney’s own summation, what we now know about the government’s health system direction is that:

• Health funding is not matching inflation and population challenges – never mind demographic challenges.
• Funding is about to be stretched even further with a range of new initiatives that have no new funding.
• The new initiatives go absolutely nowhere near need.
• At no point since the Budget have we tackled any of the of the real drivers of poor health – child poverty, obesity, poor housing, stress, overworked families.
• The government is happy to resort to insults rather than answer questions on this.

In respect for the insults Renney quotes Brown’s own announcement speech:

There’s often too much focus on what the unions, the colleges, or professional lobby groups say, and not enough focus on what the patient says.

Below the belt

Again the CTU  economist is spot on. In attacking the integrity of these bodies representing health professionals (and with high membership densities) Brown is, in effect, attacking the health professionals themselves.

But these are precisely the people who are holding the health system together and providing what care they can to their suffering patients.

It is poor political leadership, not health professionals or their representative bodies, that is helping drive this suffering.

The unions and professional bodies are their collective voices. Brown’s approach is to smear in order to divide-and-rule.

This tactic is both clumsy and ineffective. The only loser in this is not his targets but the Minister’s own credibility within the health system.

The Minister had already damaged his credibility with his earlier description of severe health professional workforce shortages as “fake news”. Hard to beat this as a ‘slap in the face’ for health professionals struggling to keep the system going.

Former health minister Shane Reti undermined by his successor

With this insult Brown also managed to undermine his immediate predecessor Dr Shane Reti who, in the 2023 election campaign, called these shortages both a crisis and the top priority to be addressed.

There’s always a but

Craig Renney has effectively debunked the numerous assertions of Minister Brown’s announcement. He is justifiably scathing of the disingenuous funding (and other) claims and the resorting to gratuitous insults.

But the current health system crisis did not occur in a vacuum. This government has perpetuated what it inherited which, in turn, was inherited by the previous government in October 2017.

Back then the health system was in a state of crisis due to being trapped in a vicious vice of acute patient demand increasing at a faster rate than population growth and widespread workforce shortages across all the health professional occupations.

This was due to the failure of the political leadership of the previous National-led government (2008-2017) to address these pressures.

Among other things, it led to bed-blocking in hospital wards, over-crowded emergency departments, and increased waiting times for first specialist assessments and follow-ups.

The problem was that the incoming Labour-led government also failed to address these pressures. By not addressing them, that government perpetuated them.

Restructuring the excuse for not addressing health system pressures

Instead Jacinda Ardern’s government focussed on restructuring thereby repeating the classic error of putting form before function.

Jacinda Ardern’s government fell into the trap of putting form before function and restructuring in the midst of a pandemic

The form of restructuring was to vertically centralise what was, by international standards, an already centralised system.

It was as inevitable as night follows day that the dominant leadership ‘command-and-control’ culture we now have would emerge with all the consequential ineptitude that this entails.

Poor elitist political decision-making has led to the chaotic, destabilised and consequentially dysfunctional national health system leadership that we now have in the form of Health New Zealand (Te Whatu Ora).

Further, Ardern’s government implemented this restructuring in the midst of the pandemic. It is difficult to imagine a more incompetent decision than overhauling the structures responsible for the funding and planning of our health system in such an unprecedented circumstance.

Nearly three years ago, in Otaihanga Second Opinion, I posted about an email I had sent to Prime Minister Ardern strongly advising her government not to proceed with this decision.

The best I got was an acknowledgement and advice that Health Minister Andrew Little would respond to me directly (which, of course, he never did):

An unresponsive Prime Minister and Health Minister to a best endeavour – Otaihanga Second Opinion

As an aside, I was personally very disappointed that the health unions failed to argue that vertical centralisation (vertical managerialism) and removing the necessary level of decision-making from where healthcare was overwhelmingly provided, was both wrong  and made worse by doing this in the midst of a pandemic.

Perpetuating the already perpetuated

Simeon Brown, as health minister, and his government are correct in highlighting this poor leadership decision-making. It has become Labour’s credibility Achilles Heel in health.

Simeon Brown is right to condemn Labour’s restructuring but this is as good as it gets

Unfortunately, however, Brown and his government are perpetuating what they inherited, just has Labour perpetuated what it inherited from its predecessor National-led government.

Labour foolishly relied on the advice of external business consultants (EY) rather than those with broader health system expertise.

All that has changed with this National-led government is that there has been a revolving door of business consultants; EY out and PwC in. The only noticeable difference between the two consultancies is that the former appears to have better table manners.

Craig Renney’s critique of Simeon Brown’s 7 March announcement is both devastating and correct. My friendly observation is that it lacks sufficient wider context and relevant pre-history although I accept that this may have been outside his scope and length constraints.

But a very good read, nevertheless.

 

Ian Powell was Executive Director of the Association of Salaried Medical Specialists, the professional union representing senior doctors and dentists in New Zealand, for over 30 years, until December 2019. He is now a health systems, labour market, and political commentator living in the small river estuary community of Otaihanga (the place by the tide). First published at Otaihanga Second Opinion