Former Health Minister calls for ‘honest’ debate about health spending

Former Health Minister Andrew Little. Photo / RNZ

Former Health Minister Andrew Little says New Zealand needs to have an honest debate about the amount of money which should be spent on the health system and what level of service that spending can realistically provide.

“It is very resource-intensive. I think, as a country, we need to have a good debate about what we think is the right level of spending. We’re a small country, so there’s always going to be limits,” Little told Q+A with Jack Tame.

His interview took place as the Government and Opposition trade blows over Health New Zealand – Te Whatu Ora’s finances. The Government says a legacy of fiscal mismanagement left by Labour has led to out-of-control spending by the agency, resulting in forecast overspend of $1.4 billion, despite funding increases. The Opposition says the problems stem from inadequate levels of funding provided by the new Government.

The latest round in that battle came on Saturday when news broke of Wellington Hospital ceasing to provide women who had recently given birth toast. Health NZ said the move was motivated by nutrition; Labour health spokeswoman Dr Ayesha Verrall said it was cost-cutting.

He said the country should be honest about the health system people want, but also the limitations of any such system.

“We actually have to be honest about what is possible, what it is we should aspire to and can achieve, but [while] knowing and understanding there’s always going to be some constraints on that,” Little said.

“I find a lot of the health debate at the moment not particularly helpful because it doesn’t talk about priorities, it doesn’t talk about the fact there are constraints and how we make the most of what we’ve got,” he said.

He said Labour had boosted health funding “significantly” to wipe DHB deficits as the merger took place. He said the Government has not kept up those funding increases. The Government has increased the health budget by more than $1.3b each year for the next three years (cumulatively $16.68b), which it notes is more than Labour set aside in its pre-election fiscal plan, which worked out at $14b or $12.5b if reduced due to cost pressures.

However, Health NZ told a Parliamentary select committee earlier this year it was going to require more than what was forecast prior to the election.

Little said in a high-inflation environment, simply standing still was going to require “reasonably significant” funding.

“When you look at what [the Government] has done in this Budget, it’s a 1.6% increase for their operational funding when general inflation is running at close to 5% at the time,” Little said.

Little said that was based on media reports the health system had not meaningfully improved in the two years following the merger of DHBs into Health NZ, which he oversaw as Minister of Health, but he said the reforms were “always going to be a five-year-plus” programme to see the benefits of consolidation.

“It was always going to be challenging because of the workforce issues, because of the worldwide shortage of health workers, and the transition from the 20 DHBs and ancillary other organisations and bringing them all together.”

Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.