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

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

3. 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

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

5. 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

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

7. Example: Mental health funding
Ministers Adams and Coleman announce “$224 million boost for mental health”
That’s for four years
In coming year $ 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

8. Example: Mental health funding
Where does the other $ 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 /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

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

10. 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

11. 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

13. 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

15. Thank you Mind the spin Discussion welcome