Understanding Health funding in the 2017 Budget 1 July 2017 Bill Rosenberg Policy Director/Economist N Z Council of Trade Unions

The Budget Statement of intentions of Government of the day Technical + Spin

The Budget Technical: how much Ministers, agencies can spend Votes e.g. Health Vote Functional classifications (“packages”) Health = Health Vote + ACC + …? Appropriations e.g. Canterbury DHB; National Mental Health Services “Initiatives” e.g. catch-up: DHBs Additional Support $439m Really new: National Bowel Screening Programme $7.238m

Spin! The Budget Big numbers! $$$Billions if possible Quote four year funding for preference! Chuck in spending from another Vote! “Have never been more $$$”!

The Budget “Have never been more $$$!” So has the cost of housing. Are you getting more for those dollars? Prices rise (like CPI) Wages rise Population increases In Health, aging increases costs And some are rising even faster – e.g. people seeking help with mental health rising 5% a year Only after funding those are we making real progress! Then really new “initiatives” need extra funding

Example: Mental health funding Ministers Adams and Coleman announce “$224 million boost for mental health”

Example: Mental health funding Ministers Adams and Coleman announce “$224 million boost for mental health” That’s for four years In coming year $53.486 million Of that, only $25 million is for Health Vote But National Mental Health Services will get $7 million less than it actually spent this year So net $18 million extra – that’s 1.2 percent on top of $1.4 billion total But 5% increase in patients, plus price rises = 7.3% needed – so a cut in real terms

Example: Mental health funding Where does the other $28.486 million go? $25 million “contingency” for not yet identified ‘Social Investment’ trials; Vote not allocated $103,000 to start MSD trial of integrated employment and mental health services $1.883 million to Corrections for better managing prisoners at risk of suicide – adds to $6.725m 2016/17 initiative. Down to $3.2m following years $1.5 million to Māori Development to continue Rangatahi Māori Suicide Prevention programme. Reduction of $209,000 on $1.709m in 2016/17

Health Vote Minister Coleman announces “Health investment increases to a record $16.8b”

Health Vote Minister Coleman announces “Health investment increases to a record $16.8b” Our analysis: Uses Treasury, Ministry of Health forecasts for prices, wages, population, aging, etc “Initiatives” from Budget More conservative than Ministry’s own Presented to Ministry, DHB, Treasury, union officials previous years Since 2010 Not including capital

Health Vote “Initiatives” total net $269 million Largest part Care and support workers pay equity settlement - $279 million We find: DHBs are $107 million short of what is needed National services $101 million short Ministry $5 million short Total $215 million short

Health Vote Shortfalls building each year since 2010 Needed almost $2.3 billion to restore funding to 2010 levels in this Budget Got $0.8 billion So $1.4 billion short of restoring to 2010 Next Government will need to spend well over $2 billion if wants to restore to 2010

Thank you Mind the spin Discussion welcome