Source: Radio New Zealand
Health NZ says “performance efficiencies” do not impact on the funding available for settlement. RNZ
Frustrated healthworkers are questioning why hospitals and health services are being asked to find another $510 million in “efficiency savings” out of this year’s budget, while $538 million earmarked for salaries went unspent last year.
The “underspend” was due in part to unfilled vacancies, slower than expected Holidays Act remediation, and the fact that Health NZ has yet to settle collective contract disputes with senior doctors or nurses.
Health NZ said “performance efficiencies” did not impact on the funding available for settlement.
However, the Association of Salaried Medical Specialists (which has been locked in a pay dispute for over a year) said it was galling that personnel costs in the most recent financial year were $538 million less than budgeted.
Last month, the Employment Relations Authority threw out Health NZ’s unprecedented request for it to set aside the bargaining process and “fix” terms and conditions for about 6600 senior doctors and dentists.
Sarah Dalton. LANCE LAWSON PHOTOGRAPHY / Supplied
The union’s executive director Sarah Dalton said scarce health dollars were going to the wrong places.
“Money is going to locums, to outsourcing to private. There is still a significant number of contracts going to consultancy firms and staff who come from those firms to do work that could and should be done by salaried staff.”
Outsourced personnel costs, including to fill roster gaps, were $162m dollars over budget in 2024/2025.
Health NZ’s annual report shows of the $538 million underspend in wages, $204 million came from delays to Collective Agreements and lower internal personnel costs.
Dalton said cuts to so-called “back office” functions were making it harder for clinical staff to do their jobs.
“We discovered recently that the restructuring in Data and Digital meant they ended up with 200 fewer staff than they actually need, and they’re still trying to catch up with that.”
Recruitment freeze is real – Labour
While Health NZ was already on track for a $200 million deficit this year, it has been asked to find a further $510 million from its operational budget to “re-invest” in patient care.
Health Minister Simeon Brown said the efficiency targets – which represented between 2-just under 5 percent of the operational budgets of the four regions – would free up cash to meet the government health targets without reducing clinical staff.
Labour’s health spokesperson Dr Ayesha Verrall. RNZ / Samuel Rillstone
However, Labour’s health spokesperson Dr Ayesha Verrall said it was hard to see how cutting resources for already stretched services would help patients.
“New Zealanders are struggling to get healthcare. It would be unbelievable if the government had underspent on health staffing and New Zealanders didn’t get care as a result.”
Verrall said while the Minister and Health NZ continued to deny there was a hiring freeze, frontline workers were saying the opposite.
“Every doctor and nurse I talk to says they can’t recruit to roles in their department, or if they do, they face massive delays, and the delays are designed to save costs.”
The Nurses’ Organisation, which represents about 60,000 nurses, midwives and healthcare assistants, is also going into the new year without a settlement.
A briefing to the minister in April – released under the Official Information Act – shows each 1 percent increase for senior doctors would cost between $20 million and $30 million.
However, due to the higher numbers of nurses, each additional 1 percent increase for them would cost taxpayers more than $100 million.
Health NZ responds
Health New Zealand said the funding available to settle these collective agreements had not changed in either the 24/25 or 25/26 financial years.
“We remain committed to settling.
“Performance efficiencies do not impact on the funding available for settlement.”
The agency continued to “actively recruit” to reduce its reliance on outsourced personnel.
In the most recent financial year, Health New Zealand increased its clinical workforce by approximately 750 full-time workers.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
