The continued growing hospitals deficit is further evidence that Health Minister Annette King is running health down to a Second World health system, National Health Spokesperson Roger Sowry said today.

Ministry of Health figures show the country's district health boards have recorded an operating deficit for the seventh consecutive quarter, with a $53.6 million deficit for the quarter to December 2001.

"Boards are reporting continued deficits because they are struggling against a 2.5 percent rise in costs double the 1.2% increase in income. This contrasts with the Government's promise of better health services when it increased taxes.

"The situation will only get worse for some boards as wage settlements and interest costs are the main reason for costs going up. While the Canterbury DHB has settled its nursing pay round, Auckland, Waitemata, Counties-Manukau and the lower North Island hospitals are currently in negotiations with nursing staff.

"Just today the Otago DHB has announced its deficit has climbed $2.6 million to $8.2 million. Auckland has a deficit of $72 million but its chief financial officer has warned the board that this could become worse.

"Yesterday Annette King said New Zealand couldn't afford to have a health system as good as Australia, Britain, the United States and Canada. In plain English that means a second-best health system for New Zealand. New Zealand should not be accepting second best," Mr Sowry said.

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