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Government facing over two and a half billion health funding gap

New figures released today by Council of Trade Unions Economist Dr Bill Rosenberg and the Association of Salaried Medical Specialists Director of Policy Lyndon Keene show the health funding gap since 2009/2010 has grown to $2.7 billion. This amount would be needed in Thursday’s Budget to fund services to the same level they were supported in 2010, and pay for new initiatives.

Dr Rosenberg said that he didn’t expect to see the entire shortfall paid back in this first Budget. “That level of cumulative underfunding, built up over nearly a decade, will take time to repair. There is a huge rebuilding job to do in health,” he said.

“But the health sector should be optimistic. The amount needed to ‘stand still’, $805 million, is less than the $846 million Labour indicated was available in its pre-election Fiscal Plan. That $805 million would be enough to ensure that the funding kept up with the pressures of rising costs, increasing population and the aging of the population, compared to the current financial year.”

“District Health Boards will collectively need an extra $594 million to cover population and cost pressures. That’s driven not only by an increasing and aging population, but also because New Zealanders have greater healthcare needs now.”

“With population growth of 10%, we’re seeing 16% more hospital visits than 2009/10 [1]. The need for mental health services far exceeds the growth in resources. Investing in better access to G.P.s and other primary health care, housing and public health takes time to have an impact, but pay off many times over in the long run.”

“We haven’t included in this analysis a detailed exploration of all the capital expenditure needed, because it is complex and the extent of need, like the hospital buildings at Middlemore, is still becoming clear. But we do know more than $14 billion will be needed to fix DHB facilities over the next 10 years because of underinvestment and deferred maintenance. [2]

“When costed policy commitments are included, the estimated spend to maintain services rises to $1.021 billion, but the full details of those commitments won’t be available until Thursday. We all know that wage and staffing pressures in the health sector have also reached boiling point, and I don’t think anyone wants to see our nurses, midwives or other health staff stretched any further. Asking health workers to subsidise the cost of the services they provide through unpaid and underpaid work is not sustainable.”

“There’s a long way to go to get our health system back to full fitness. To make real progress the Government will have to review their fiscal settings, including overall revenue and spending constraints. However, we are optimistic this year’s Vote Health will head in the right direction.”

[1]  [2]