NURSES SOCIETY RESPONSE TO BUDGET 2025
The latest budget allocates NZ$32.7 billion to Vote Health operating funding, which at first glance looks like a reasonable amount, given current economic challenges.
However, at best, this funding is only a 4.8% increase. Some health economists have calculated that an increase of less than 5% is essentially a zero increase or a cut.
Moreover, this funding and increase must be seen in light of the following:
· decades of sustained, historical underfunding
· unmet current needs
· demographic changes; for example, people are living longer and health needs increase with ageing
· more treatment options
· population growth
· ongoing staffing challenges and the need to provide for salary growth.
Notably, around two thirds of health expenditure is for staffing. Health workforce shortages are a worldwide problem. Funding also needs to provide for ongoing wage increases.
The most significant budget increase in recent years was in 2022 under the previous government. Most of the extra funding at that time was for long-overdue pay increases for health professionals, primarily nurses.
Clearly, the health system is currently subject to significant cost pressures. Furthermore, health costs are increasing faster than general inflation.
A recent health economics analysis calculated that, to maintain the same level of service in the United Kingdom, public spending on health would need to increase by 2.8% in real terms (above inflation) each year.
Clearly, there are challenging global economic issues that invariably impact on health funding. However, many of the budget challenges impacting Aotearoa New Zealand are a result of self-imposed constraints by the current government policies.
While the current Health Vote of NZ$32.7 billion is a record amount, it only represents a 4.8% increase in overall funding for the sector. Sadly, a 4.8% increase in Vote Health amounts to ‘merely standing still’.
Furthermore, at a time when there are obvious infrastructure needs across Te Whatu Ora, only NZ$1 billion is allocated for new capital expenditure. That amount will not go far.
Primary care has received a welcome extra NZ$447 million. This was expected. However, this barely compensates for historic inadequate primary care capitation funding, as well as an imperfect system of primary care funding and delivery.
Predictably, the government is claiming health is a winner in Budget 2025. However, in reality, a 4.8% increase is not even the status quo. Likewise, a 4.4% increase for Health New Zealand/Te Whatu Ora is effectively a zero increase.
Based on our calculations – using government statistics on patient numbers and procedures – the extra funding is, at best, likely to deliver the following:
· a 2.3% increase in the number of people receiving inpatient care
· 6.5% additional planned care treatments
· a 3.6% increase in ED presentations
· 1% additional primary care encounters
· 1.2% additional bed nights in residential aged care.
Arguably, with the allocated amounts, even achieving any increase in numbers may well be unlikely.
NSNZ Comments on Budget 2025 PDF
NURSES SOCIETY RESPONSE TO BUDGET 2025
The latest budget allocates NZ$32.7 billion to Vote Health operating funding, which at first glance looks like a reasonable amount, given current economic challenges.
However, at best, this funding is only a 4.8% increase. Some health economists have calculated that an increase of less than 5% is essentially a zero increase or a cut.
Moreover, this funding and increase must be seen in light of the following:
· decades of sustained, historical underfunding
· unmet current needs
· demographic changes; for example, people are living longer and health needs increase with ageing
· more treatment options
· population growth
· ongoing staffing challenges and the need to provide for salary growth.
Notably, around two thirds of health expenditure is for staffing. Health workforce shortages are a worldwide problem. Funding also needs to provide for ongoing wage increases.
The most significant budget increase in recent years was in 2022 under the previous government. Most of the extra funding at that time was for long-overdue pay increases for health professionals, primarily nurses.
Clearly, the health system is currently subject to significant cost pressures. Furthermore, health costs are increasing faster than general inflation.
A recent health economics analysis calculated that, to maintain the same level of service in the United Kingdom, public spending on health would need to increase by 2.8% in real terms (above inflation) each year.
Clearly, there are challenging global economic issues that invariably impact on health funding. However, many of the budget challenges impacting Aotearoa New Zealand are a result of self-imposed constraints by the current government policies.
While the current Health Vote of NZ$32.7 billion is a record amount, it only represents a 4.8% increase in overall funding for the sector. Sadly, a 4.8% increase in Vote Health amounts to ‘merely standing still’.
Furthermore, at a time when there are obvious infrastructure needs across Te Whatu Ora, only NZ$1 billion is allocated for new capital expenditure. That amount will not go far.
Primary care has received a welcome extra NZ$447 million. This was expected. However, this barely compensates for historic inadequate primary care capitation funding, as well as an imperfect system of primary care funding and delivery.
Predictably, the government is claiming health is a winner in Budget 2025. However, in reality, a 4.8% increase is not even the status quo. Likewise, a 4.4% increase for Health New Zealand/Te Whatu Ora is effectively a zero increase.
Based on our calculations – using government statistics on patient numbers and procedures – the extra funding is, at best, likely to deliver the following:
· a 2.3% increase in the number of people receiving inpatient care
· 6.5% additional planned care treatments
· a 3.6% increase in ED presentations
· 1% additional primary care encounters
· 1.2% additional bed nights in residential aged care.
Arguably, with the allocated amounts, even achieving any increase in numbers may well be unlikely.
NSNZ Comments on Budget 2025 PDF