Guest Blog: Ian Powell – What do they know of balance sheets who only balance sheets know?

I’m a self-confessed ‘cricket nut’ or, as former Prime Minister Jacinda Ardern once said of her finance minister Grant Robertson, a ‘cricket tragic’.

For some time I used to brag about playing with one of New Zealand’s most successful test cricket captains, Jeremy Coney (per capita probably the most successful).

However, whenever pressed for further details, I had to admit that this was playing with a tennis ball on a court at the back of his parents’ home in Ngaio.

Despite this corrective I could at least hand-on-heart claim that for three successive seasons I reached the lofty heights of being awarded trophies as the Kapiti Old Boys President Grade team’s best bowler.

I bowled ‘autumn leaves’ as did Coney himself at test level (his own description). It is difficult trying to hit an autumn leaf with a cricket bat; just saying!

From cricket to Finance Minister Nicola Willis; not a quantum leap

Cyril Lionel Robert James (1901-1989) transcended the cricket and political worlds. Commonly known as CLR James he was a Trinidadian historian, journalist, and Marxist writer.

His historical and political works, including as a pioneering post-colonial voice have been influential. His famed book The Black Jacobins on the Haitian revolution is an example.

But there was more to James than being a public intellectual. He loved cricket. More than a ‘cricket nut’ or ‘tragic’, he was an erudite commentator (also not a bad player back in his day).

In 1963 James published one of his masterpieces, Beyond a Boundary, where he where he argued that cricket was not merely a sport. Rather it was a complex art form inextricably linked to politics, sociology, and culture.

CLR James has much wisdom to offer Finance Minister Nicola Willis (and Health NZ Chair Lester Levy)

In particular, he famously asked: “What do they know of cricket who only cricket know?” In other words, to truly understand the game of cricket, one must understand the society surrounding it.

For James cricket was not just a technical game; instead it is an aesthetic experience and a reflection of life, class, and history.

NZ Herald’s Thomas Couglan reports revealing Finance Minister’s comments on Health NZ performance

I thought of James’ famous question when reading an article by NZ Herald Political Editor Thomas Coughlan (17 January): 2026 Budget plans. My thinking was not a quantum leap.

The article covered Finance Minister Nicola Willis’ budget plans for the 2026-27 including for Health New Zealand (Te Whatu Ora); responsible for the funding, planning and provision of Aotearoa New Zealand’s public health system.

In a subsequent blog post 10 days later, I discussed her comments in the context of the Minister’s failure to make a diagnosis before determining the treatment of the health system: Diagnosis before treatment, not after.

Balance sheet thinking

But the Finance Minister’s thinking, based on a narrow balance sheet position, led me to further consider both the serious limitations of this thinking and the harm it can cause.

Health balance sheets are a snapshot at a point in time, not diagnosis or performance barometer

A balance sheet is also known as a statement of financial position. Usually it is for a company but also not-for-profit organisations, including crown agencies such as Te Whatu Ora.

In respect of the latter it is a snapshot that includes assets, liabilities, revenue and expenditure at the end of a reporting period. In the case of Health New Zealand it focusses on operational budgets at the end of a financial year (30 June).

Thomas Couglan in his above-mentioned article reports Willis as saying:

“Quite famously, Health NZ had a bit of a disaster … It didn’t stick to its budgets at all, which undermined what we were trying to achieve with its forward funding approach,” she said.

Willis said she was also dissatisfied with the relatively blunt and untargeted way health was currently funded. The way the system currently works in most cases is that ministers hand over large sums of money to delivery agencies, which then have a great degree of discretion on where it goes (the Government sometimes funds explicit things outside of this bulk funding, like vaccination programmes, which often have their own appropriation).

Further:

“We are contemplating the question of should we be giving ourselves more discretion to direct that more surgically in the future,” Willis said.

This means Budget 2026 could feature far more proscriptive budgeting for health, and a return to the old year-by-year funding model. Willis said the Government would still increase health funding every year.

Finance Minister Nicola Willis’s understanding of health system balance sheets is confined to them rather than what sits behind them

Nicola Willis’ statements are the result of a snapshot balance sheet approach. This has the effect of factoring out everything that leads to what sits behind the prevailing current protracted health system crisis and its seriousness.

This factoring out leads to the Minister’s unsubstantiated claim that the cause of Health New Zealand’s balance sheet performance was because of the former Labour government’s decision to shift from annual to rolling three year budgeting and that HNZ itself had too much discretion.

Her solution, in the forthcoming May Budget, is to shift to “far more proscriptive budgeting”and return to the previous year-by-year funding model.

And yet this longer term funding approach was more consistent with the need to enable longer term health system development and delivery planning.

The three year budgeting model was not a silver bullet and not without limitations. But it did reflect non-balance sheet driven thinking.

Former Finance Minister Grant Robertson knew more than just balance sheets (and just cricket)

While I don’t know whether Nicola Willis is a ‘cricket tragic’, her Labour predecessor Grant Roberston certainly is. It would not surprise me if he was also familiar with and respected the worldly wisdom of CLR James.

A timely lesson

There is a timely lesson on the shortcomings of balance sheet decision-making to be learnt from the recently published National Infrastructure Commission Report. Its core finding cuts to the chase.

National Infrastructure Commission report highlight limits of narrow balance sheet thinking

On the one hand, New Zealand spends around 5.8% (over $20 billion) of Gross Domestic Product on infrastructure each year; one of the highest rates in the developed world.

But, on the other hand, Aotearoa is ranked near the bottom of country ranking for efficiency. Per capita New Zealand achieves less than many of our more-efficient international peers; fourth-to-last in the OECD for asset management.

Short-term thinking has been at the expense of more rigorous long-term thinking. The Commission’s report suggests that balance sheet mentality has contributed to this outcome. This resonates strongly with the health system’s own experience.

The more leaders understand health systems, the better they understand balance sheet snapshots

If Aotearoa New Zealand’s health system is to evolve from a system that one feels so sad and despairing about to a system that one feels proud of, then it needs a political leadership whose knowledge of balance sheets is not balance sheets only based.

Lester Levy has led Health NZ since June 2024; his leadership culture and meeting budget requirements priority is not ‘fit-for-purpose’

This requires recognising that Health New Zealand’s ‘command and control’ leadership culture stemming from its board governance has to end.

The board needs to be comprised of those who understand:

• the importance of devolving decision-making to where most healthcare is provided;
• that health funding should be seen through an investment lens (not a fiscal liability lens) that benefits both the accessibility and quality of healthcare and economic performance;
• that the health workforce is best placed to know how to improve the health system at various levels and should be empowered to do so;

• that acute patient demand is rising at a higher rate than population growth since 2011 thereby causing hospital inpatient ‘bed-blocking’ and overcrowded emergency departments;
• the importance of the government addressing the  external social determinants of health, such as low incomes and housing, which drive this rising acute patient demand;
• recognises and addresses, through targeted recruitment and retention operational strategies, the longstanding neglect of severe workforce shortages in virtually all health professional occupations; and
• recognises that while health targets might, if clinically developed, lead to system improvements at various levels, they are not by their very nature a barometer of health system performance.

To the extent that this shift happens is the extent to which New Zealand’s health system political and bureaucratic leaders know more about balance sheets than balance sheets.

Or, to put it another way, these leaders need to think Cyril Lionel Robert James!