Government Cuts – Billions missing from health budget – CTU

Source: New Zealand Council of Trade Unions Te Kauae Kaimahi (CTU)

New analysis from the New Zealand Council of Trade Unions Te Kauae Kaimahi shows that the health service is likely to be underfunded by between $1.2bn to $2bn at the Budget.

“We have examined the spending decisions and announcements of the Minister of Health over the past few months. These demonstrate a pattern of making a new service promise but not providing any new funding for that new service,” said NZCTU Economist Craig Renney.

“That means the commitments have to be paid out of the existing budget, which is already under huge pressure. These sneaky cuts add up to $1.2bn across 4 years.

“At Budget 2024 the government provided $1.370bn for cost pressures. This has been calculated by the Treasury as simply covering the cost of existing services. The $1.2bn of new spending are all new services on top. If they come from the ‘cost pressure’ payment above, that acts as a direct cut to existing health services.

“Assuming the Treasury cost pressure costs are right, health needs $1.713bn just to stand still at Budget 2025 in direct new funding – and likely a figure closer to $2bn once the unknown costs are added.

 “If this money is coming from pay equity funding, it would be the equivalent of those low-income health workers paying for the new service themselves.

“In opposition, National said that it would “prioritise increases in funding for health and education to account for inflation.” The government now appears to be robbing the very funding set aside for inflation in health to pay for its new priorities, breaking their pre-election promise,” said Renney. 

The government has also made the following announcements and has not provided any costing information with those announcements. These costs are likely in the hundreds of millions, but we simply have no current idea about if the government will provide any further resources for them.

MIL OSI