$238 million health budget shortfall

CTU Media Release

30 May 2013

$238 million health budget shortfall

A CTU analysis of the Health Vote in the Budget has found that it was an estimated $238 million short.

CTU Economist Bill Rosenberg says "our analysis has shown that Health needed at least $238 million more funding than it received in order to cover announced new services, increasing costs, population growth and the effects of an ageing population."

"The budget listed several services that will receive more funding, but these will have to come at the cost of cuts in other services."

"District Health Boards have been underfunded by an estimated $111 million. This will mean that DHBs, who are already stretched, will be forced to find even more savings, or, more likely look to more user pays or cut services."

"National services like Child Health Services, Emergency Services, Maternity Services and Mental Health and Public Health received $123 million below what they needed."

"The analysis the CTU carried out prior to the Budget assumed that CPI would rise by 1.8 percent in the year to June 2014, wages would increase by 1.8 percent (1.6 percent in the DHBs), and an increase of 1.42 percent for the growing and ageing population.” Further details are in that report.

"Last year we estimated that Health was $254 million underfunded in that year’s Budget. The Ministry of Health’s estimate was underfunding of $376 million. This is becoming a compounding problem that will ultimately be paid for in health outcomes. Our workers in the health system are highly qualified and dedicated, but the sector won't be able to give much more before something gives.”

These are the main conclusions of a comparison of the 2013 Budget with the analysis the CTU carried out prior to the Budget which found that $445 million was required ¬to just keep operational expenditure up with rising costs, population growth, and ageing. The paper with details of this analysis can be found here and here.

ENDS

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