The Government is preparing to allocate a record sum of money for new operational expenditure in Budget 2022 - largely to pay for health reforms.
Finance Minister Grant Robertson said, in his just-released Budget Policy Statement, he will allocate a whopping $6 billion to new operational expenditure in Budget 2022, followed by $4 billion in 2023, $3 billion in 2024 and $3 billion in 2025.
By way of context, $3.8 billion was allocated to new operational expenditure in Budget 2021, when the Government boosted the welfare system.
Robertson stressed the $6 billion will be a “one-off, reflecting substantial investment in support of the Government’s significant reform programmes, including the transformation of the health system”.
“There is a need for substantial investment to ensure that Health New Zealand and the Māori Health Authority are established on a secure and stable footing and are able to address pressing health sector needs,” Robertson said.
“As a part of Budget 2022 the Government will be making a step change in how it invests by embedding a multi-year funding approach for some sectors.
“This means Budget 2022 decisions for these sectors will cover new funding initiatives for a few years. Therefore, it is generally expected that these sectors will not receive further funding through the next few annual Budget processes.”
Robertson said the funding showed the Labour Government is in fact being “transformational”.
As for capital expenditure, Robertson said the multi-year capital allowance will increase by $4 billion across the four-year forecast period to $9.8 billion.
ETS revenue ringfenced for climate expenditure
Separately, Robertson confirmed progress has been made on his Budget 2021 announcement to ringfence revenue received from the Emissions Trading Scheme and use it for climate initiatives.
Accordingly, $4.5 billion will be allocated to a “Climate Emergency Response Fund” as a part of Budget 2022.
The fund will be used to support both operating and capital expenditure related to climate change.
However, Robertson said in the Budget Policy Statement that more funding may be needed, and the Fund "does not represent the whole picture for climate spending".
"There is a range of funding mechanisms available, including existing funds like the National Land Transport Fund, and institutions like New Zealand Green Investment Finance," he said.
"The Government is also committed to partnering with the private sector to meet the funding and financing challenges of the climate transition."
Treasury has committed to issuing green bonds from 2022, for example.
63 Comments
The Government needs to urgently establish quotas for number of visas issued to healthcare workers as a proportion of the total number to ensure we aren't digging ourselves further into a hole here by bringing in more consumers of healthcare than those working in the sector.
At least while overpaid bureaucrats sipping on lattes in their cushy Wellington offices figure out how to train more nurses locally.
Wife works in the medical system. With the amount of nursing staff waiting to exit to Aussie I agree, we run the risk of loosing capability in the overall system. Another friend at ADHB indicated they are 40 nurses short now. What will happen when it 80 short...or more?
I saw figures a few months ago and it was great deal higher than that.
I know one hospital where a nurse was the only person on duty for her critical ward. Pleas for help were ignored. She was so frantic trying to keep every body safe, she had no time for food or attend to any personal needs. She eventually peed herself - bad enough- but she did not have time to clean her self up until the next shift turned up. (just consider the dedication of somebody who is prepared to go through that just so that she is doing her best to keep you safe. Imagine her anguish.) I could go on for paragraphs with many other shocking examples. The up shot is that the system is in free fall; quite independently of Covid. If that starts having significant impact- well use your imagination.
My sisters and daughter are nurses. All three work for major hospitals in either Auckland or Wellington. Two are in theatre and one is a district nurse. Where was all this concern for nurses during the Key administration's purge of the public service? The talk about not cutting front-line staffing numbers was nonsense. Nurses raised the alarm then about sinking lid policies during which staff who left were not replaced. My district nurse sister who is about to retire, commented recently that over the course of that decade, the workload grew exponentially, as fewer staff were required to do more and more. Our public health system is hanging on by its fingernails. At least we still have one. Under a National government and certainly ACT, I have no doubt that it would have been privatised by now.
The government need to address the cost of living, with the elephant in the room being housing. Why bother staying when you can only just afford to put a roof over your head renting? I don't blame the exodus to Australia. Fix the housing market and you'll go a long way to solving the brain drain.
that has been thirty years in the making, bit hard to turn around overnight,
so many issues, cheap credit, loans for housing ranked above all other lending, tax advantages for investors, immigration policies, council restrictions, building rules, building practices, tradesman training
the only way to fix quickly would be some sort of resurrection of the ministry of works and laws passed so they can build whole subdivsions without council approval for each individual house, but an approval for the house design
"Why bother staying when you can only just afford to put a roof over your head renting?"
We aren't there yet. On average housing equates to 30-35% of household income.
A lot of people choose to live beyond their means (because we don't teach budgeting in school & we have too much advertising). Choosing to prioritize lifestyle is fine but choosing to prioritize lifestyle and expecting to buy a house is unrealistic.
The Nurse's association must be in somebody's back pocket. The primary focus of their magazine is Maori promo, not work issues.
The Police, fire, nor teachers would put up with the pay and working conditions (and Police and Fire have no pre entry quals).
But who cares...plenty of cheap imports to bring in to undermine the locals.
All that extra budget is paid for by the taxpayers, including those taxpayers that look after their health. I say tax the bejesus out of the obviously unhealthy foods and drinks to go some way to paying for the downstream health costs they incur and to encourage a better diet.
But that won't happen until we ban corporate donations to politicians.
Fun fact the obese might live longer than those on the other side of the scale but it is the elderly who cost the most and if you were not aware the elderly (fit, thin or not) who receive the largest and most expensive benefits of the social system. If you want to live long then you too will be taking a greater share of money than those who are younger. Even sadder it is those who are working in hard labour jobs in their youth who need the most joint support costs through the health system and are the most likely to be exposed to toxins and carcinogens. Those who are seen as the fittest are often those who cost the most or are you ignorant of what befalls most professional sports players. Permanent brain damage needing long term medical support can be the least of their worries. A tragedy though still to be sure. If you need more evidence just take a look at ACCs support costs for which not all, and often not most work related damage is covered.
Health Minister Andrew Little said earlier in the year “....... So, what I’m saying is how can we possibly have pumped in billions of extra dollars, and it not appear to have made a difference?....."
We have a Labour Government and Wellington civil service who think throwing cash is enough, without any idea of how to make it productive.
And it's money we don't have.
Fried chicken isn't necessarily that bad in terms of calories.
Sugar laden drinks should be taxed out of existence. Diet drinks much better. So few diet drinks in stock at the supermarkets.
There are far superior and safer alternatives to alcohol but our drug policies are as regressive as our anti nuclear energy policies.
I don't buy that; ex alcoholics would be a very small percentage of the population.
Have a look at life expectancy by country: https://www.worldometers.info/demographics/life-expectancy. There are some quite big drinkers at the top. The Japanese at 2 certainly give it a fair nudge, Ireland are at 18, South Korea at 11 like to party, and the Aussies are at 8. The UAE are a rich non-drinking country, why are they only at 51 in the list? Alcohol might be bad for you and might decrease your lifespan slightly, but if it was really bad for you then I can't see that list being in that order.
The US does very badly for such a rich nation, so yes the fast food will kill you.
I suspect a lion's share of the beefed up public budgets is actually soaked up by consulting firms, contractors, equity and comms advisors, headhunters, etc.
The headcount at the Department of PM and Cabinet alone grew 78% in 2021 compared to 2020.
https://www.rnz.co.nz/news/national/446923/govt-agency-recruitment-hurt…
A major recruitment firm named "Talent Acquisition Specialist" as a top-5 in-demand skill in Wellington.
The money has been sucked up by the DHB's which are on life support and good riddance to them. Here's a slice of history: we used to have a really good, "productive" public health system. It was set up in the 1930s and with a few tweaks served us very well until the 1990s when ideologically motivated idiots - led by Alan Gibb - decided that it would be far more "efficient" to impose a competitive corporate structure, c/- the funder/provider split. Introduction of a bunch of CHE's then DHB's, staffed by people without professional skills, operating at a distance from the workers at the coalface. Over the years the DHB's have become little empires. No accountability. More not less bureaucracy and rather expensive as it turned out due to all those fancy new managers, whom the nursing staff hold in contempt. Another failed experiment from the halcyon days of neoliberalism.
Mass Exodus of nurses because of not affording a home in NZ is on the cards. If you open the immigration also nurses and medical staff will take NZ passport and leave NZ
Health cannot be reformed without retaining good medical resources, on one side you are making life tougher with property price and inflation and on the other side, you expect things to improve.
Integrating 20-odd Financials, patient management, payroll/HR, building maintenance, inventory, procurement, budgeting and Capex systems into the One Ring to Rule 'Em All system is gonna take serious coin.
Expect juicy news items as components go udders-up on go-live day, costs overrun, partners bug out, scopes creep, time frames blow out, and key staff take time out to tend the garden.
Think of it as Transmission Gully on steroids....
Consultant heaven, until the finger-pointing begins.....
How many additional ICU bed have they added since the start of pandemic to prepare themselves for future. Why no new hospital to boost the health system and to pay well to attract Doctors and Nurses.
Had to wait till 90% vaccination rate to cover up the failed health system.
I think the majority of hospitals in NZ are likened to third world countries as far as the infrastructure is concerned. Trying to keep Covid out of the country was the only way to deal with it or the health system would have absolutely crashed.
Is there a solution? I really see how. Not one NZ can afford anyway. Look at America. Arguably one of the more advanced in ICU bed availability and top of the line medical treatment in the world, with 800,000 plus dead form Covid??? Also one of the most expensive systems for the citizens as it is 'pay your own way'. Take it private?? An example of a health Ins policy in America costs about $12,000.00 a year for an individual 60 odd years of age, with a $7000 deductible to pay before any insurance kicks in. Because NZ health is primarily funded by taxpayer dollars, if NZ wants to improve its woefully underfunded medical infrastructure and industry employment issues it will need an increase in taxes to pay for it, it doesn't come out of 'your right' or thin air. You can already hear the screams against more taxes. "We want better health care but we don't want to pay for it" crowd.
Unless you count in the sheep and cattle paying taxes ( on top of the FART tax of course) there is no solution for NZ. It will just have to struggle along. Stay away from the likes of KFC and cross your fingers.
Yea it's hard to take that comment as anything other than 'Not only are we not going to offer relief for wage inflation incurring high tax levels as people try to keep up with escalating living costs, but we're actively going to use it to inflate Crown debt away'.
How is this not some sort of enormous financial scandal? People can only spend their net wages, which are increasingly falling behind what it costs to get by in this country.
I turned 76 in April and could count myself fortunate in having had little to do with the health service. That changed abruptly following my cancer diagnosis in August. Since then, I have become acutely aware of some of the deficiencies, particularly the decades long underfunding of Pharmac.
I quickly learned that the only drugs which could offer me the possibility of suppressing the cancer for a period of time are not funded. These drugs are commonly available in many countries. The cost of them is such-in six figures- that few Kiwis can afford them, thus greatly shortening their lives and stupidly, putting more pressure on the health service. I am one of those fortunate enough to be able to finance them. My investments in the NZ stockmarket over the past 17 years has paid off in a way I did not anticipate.
A 2019 report International Comparisons of Modern medicine ranked NZ LAST among OECD countries for both access to to funded medicine and pharmaceutical investment overall. This is shameful. Simple lack of money is blighting the lives of thousands.
Best of luck with your treatment - it is a shame that you've had to fund this yourself. I do worry that any major reforms of Pharmac could throw the baby out with the bathwater - I do believe they do a good job achieving good prices through collective bargaining and the difficult job of allocating resources. As you say, the real issue is that there isn't enough money in the budget.
mfd,
Thanks. I too think that Pharmac on the whole does a decent job, though there are transparency issues on how they make their decisions. They will never be able to fund every drug, but I am led to believe that it would take only around $400m pa to put them back to where they should be if their budget had been lifted on a regular basis. Of course, that is a significant sum of money but affordable inthe context of total government spending-and it would have immediate and measurable benefits.
Sorry the hear that. It is clearly a funding shortfall. NZ is towing a massive amount of non productive people, and they cost tax dollers. Add to that the productive are getting taxed heavily already, and squeezed out of the security of owning a house by unproductive debt speculation, real tax payers are driven to look at options. Not hard to see why so many leveraged up on residential tax free gains to avoid paying income tax. Note - this was ultimately a very selfish act that has done nothing but make things worse, and is driving a generation of much needed future tax payers overseas.
The last couple of Govt's have done nothing but support this by protecting housing from a reset to avoid upsetting the bank profit strangulation of the NZ economy.
I wish you well and a steady recovery. Sadly this is all too true a problem for many. With lives cut short in their 20s while they could live normal long lives with treatment and see children married but instead we spend a far greater amount to fund medicines that have little to no effect and cost the price of a softdrink in a supermarket without subsidy. We do not have priorities right and instead of funding based on need and effects to life we fund on a bias of politicians and mollifying the masses with minor trinkets. Nothing gets changed until someone of fame gets a disease and only then does their individual treatment get funded while everyone else is ignored. Givealittle should be ashamed it has by and large turned life into a popularity competition which most of those dying who could be saved an extra 40+ years learn how much their lives don't matter and are not valued by others around them. Since we do not have the coroner resources many deaths that are not of natural causes get past over and ignored because of bias. I lost 2 friends and 3 family members in the past few years who could still be alive but died due to lack of medical care, even one who had just got married months. All denied investigations. The reason given a bias against them. There is no justice, health or fairness in the medical system. Just more layers of politics and harm and to have to legally fight to survive it is a battle in itself. You do not see them in the media though. Because their lives have been truly made valueless to the popularity channels. Easily done once they are dead far before their time.
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