Govt points finger at National over 'eye-watering' DHB deficit

Finance Minister Grant Robertson says the DHB deficits are the National Party's legacy, but National has hit back. Photo / Michael Craig

The Government is continuing to blame National for the increasing blowout in District Health Board (DHB) deficits, after announcing DHBs are now $1 billion in the red.

That's $700 million higher than the expected deficit, as forecast in May's Budget.

Both Finance Minister Grant Robertson and Minister of Health David Clark today defended the blowout by pointing the finger at the previous National Government.

But National's health spokesman Michael Woodhouse said the $1 billion deficit blowout was "eye-watering".

He said the Government has been in power for two years and needs to take responsibility.

"No one but the most ardent Labour supporter would believe that [it was National's fault]."

The Treasury today released the Crown accounts information – a detailed look into the Government's books.

Although it revealed a strong $7.5 billion surplus and record low debt levels, when compared to GDP, the figures also show the total DHB deficit had jumped to $1 billion.

Just five months ago in the Budget, the total DHB deficit was expected to be $390 million.

In a statement, released soon after the Crown-account figures were made public, Clark said the $700 million DHB deficit increase was largely due to an error in payroll records.

Health officials have found that $550 million to $650 million is owed to DHB staff to comply with the Holidays Act.

Clark expects it to take up to two years for DHBs to review and rectify what he has called a "historic issue".

He said more than 100,000 health workers, both current and former staff, have been "short-changed over many years".

Outside what is owed to workers by DHBs, Clark said the underlying deficit is $415 million.

"Four DHBs (Canterbury, Waikato, Counties Manukau and Southern) account for most of the underlying deficit - $268 million in total, that's 65 per cent," he said.

Speaking to reporters at the Treasury lock-up this afternoon, Robertson also blamed the deficit on the previous National Government.

"We have had years of under-investment in our health system and that builds up over time."

But Woodhouse said the DHB blowout was "entirely foreseeable" and Clark should have taken steps to avoid it.

"Instead, deficits have been rapidly increasing over the past year and health services are in crisis.

He said Clark has let deficits balloon to record highs because the Government has neither provided the funding they claimed they would, nor set expectations for continued fiscal discipline.

"Dr Clark has let DHBs' finances get completely out of control."

Robertson said the Government planned to spend even more on health to reduce the deficit.

In May's Budget, the Government allocated almost $20 billion to health.

Robertson also said pointed to the recently released report on health and the disability sector and said that piece of work had "some pathways".