The ‘How Much Funding is Needed for Health in the 2026 Budget?‘ report just released by Kaitiaki Hauora reveals the extent of underfunding of our health system, and the pressing need for significant changes to our tax system to gather the revenue we need to build a better health system, according to the Better Taxes for a Better Future Campaign.
“The health system is in crisis, there is a pressing need for more funding. But this is a problem years in the making – we have underfunded our health system for many years, while prioritising tax cuts for landlords and tobacco companies, over meeting the basic needs of our communities,” said Kate Stone, spokesperson for the Better Taxes for a Better Future campaign.
The report predicts that it is likely that Budget 2026 will not provide enough funding to even match the cost and demographic pressures for the year ahead. The authors estimate that $1.405 billion is needed for Vote Health just to meet those pressures, but the government has undertaken to provide just $1.37 billion to cover both rising costs and demographic pressures, and any new initiatives announced by the Government in this year’s Budget.
Looking beyond the funding needed to keep the health system going over the next year, to close the gaps in key areas of our health system, such as primary health, Hauora Māori, workforce and electives would require $6,834m in operational funding per year plus $1,061m in capital.
“The amount required to address immediate pressures and to build a health system that can deliver quality, timely and affordable care to everyone in Aotearoa will be significant. We need a tax system that can raise the revenue we need not just for a bandaid, but to close these gaps that have been widening over time,” said Stone.
“We are a low tax country relative to countries we like to compare ourselves to, and this flows through to our health system. Our health funding is much lower than 16 other countries compared in the report and has been for some time. Most of these countries have higher levels of tax, including higher top income tax rates and a comprehensive capital gains tax (CGT). Australia, for example, used its recent Budget to increase the coverage of its CGT and increase taxes on trusts.”
“In New Zealand we rely heavily on income tax and GST paid by working people, but most accumulated wealth goes largely untaxed. If we close these gaps in our tax system and ensure that big corporates and the ultra wealthy contribute their fair share we can generate the revenue we need to build a better health system,” said Stone.