Health Minister: “we won’t be able to afford everything straight away”

Minister of Health David Clark has conceded on Q&A that there is not enough money available to pay for all Labour’s election promises, like reduced doctors fees and pay equity for nurses. He blames it on the competing demands of other parties in Government, and ‘underfunding’ by the last Government – Health is always underfunded in that it is never possible to afford all the needs and demands.

Corin Dann: It’s interesting talking to people in the health sector this week. One in the nursing sector said to me they voted National because even though they were sympathetic to many of the things you’re doing, because they didn’t believe you would have enough money left after making all your promises for the nurses, for their pay settlement. And that’s the reality, isn’t it? The nurses aren’t going to be able to get what they want because you’ve got so many other things to pay for.

David Clark: We’ve set aside money across health. We’ve said that we want to spend more money, and we did say we wanted to spend more money than our opponents. But we won’t be able to afford everything straight away. Nobody pretends we can. We won’t be able to afford everything in our first Budget. We’ve got to do it step by step. And there is a backlog of underfunding. We’re going to take steps to address that.
Corin Dann: You went into the election campaign making it clear you would deliver all this money and you would deliver all these promises.

David Clark: We will deliver the promises we make.

Corin Dann: In the first term?

David Clark: In the first term.

Corin Dann: All of them?

David Clark: Corin, all of them, subject to any new information that comes to hand.

The ‘new information that has come to hand’ since Clark became Minister is that the Government has already committed a large amount to things like the benefit increases, fee-free tertiary education and the Provincial Development Fund, and there isn’t going to be enough available for everything promised for Health.

Corin Dann: So new hospitals, what about—Let’s just stay back on the nurses’ pay very quickly. Because the issue here seems to be pay equity, isn’t it? That’s the big problem you’ve got looming. Are nurses going to get pay equity this term?

David Clark: Pay equity is further down. It was in the negotiated offer that went forward previously, pay equity – a shift towards that. It is huge. Let’s not pretend it’s not. It’s a serious issue, but it does need to be tackled.

Corin Dann: But why shouldn’t they get pay equity when other parts of the health sector are and we’re hearing stories of nurses who feel like they’re earning less than caregivers when they’re 20 years experienced or whatever. Why shouldn’t they be getting pay equity now?

David Clark: Well, they should be getting pay equity, but there is a process to work through to work out how we do that.

Corin Dann: It’s money, isn’t it? Because according to the advice given to the Labour Party during the coalition negotiations, the estimated cost from collective bargaining and pay equity, if you join them together, for the health sector over three years is $750 million. You don’t have it, do you?

David Clark: Yeah, these are big sums. Of course we have the money. We have budgeted really carefully. Labour Governments and coalitions with Labour in them are held to a higher standard. We know that.

I’ve heard this claimed before, as far as I know it is subjective and unsubstantiated, and I call bollocks on it.

David Clark: And that’s why we did our sums very carefully when we were in opposition, and the promises that have been made in the coalition agreements and the confidence and supply agreements will be kept. We have accounted for them and we will deliver on them.

But when?

Corin Dann: Let’s look at primary healthcare. Is that going to be the big focus for you in many ways? Because that’s what’s going to make the big cost savings, isn’t it?

David Clark: Absolutely. Longer-term, it will. In the short term, we’ve got so much unmet need. Last year over 500,000 New Zealanders couldn’t afford to go to their GP. One in four adults in New Zealand now cannot afford to go to their GP in any given year for reasons of cost.

Corin Dann: So will we see in the Budget you deliver on your promises to bring GPs visit down by, what, $10 on average? From $40 to $30?

David Clark: We’re going to have to phase some of these initiatives. There’s no doubt about that. I’m not going to skate around that, and I’m not going to make the Budget announcement today, you understand that, Corin.

Corin Dann: But you are signalling that that’s not coming all at once?

David Clark: We will make healthcare more affordable, and that includes primary care.

Corin Dann: So when can someone expect to see the average get down to 30? 

David Clark: Corin, I can’t announce that today. We are phasing our priorities, but we are absolutely committed to the principle of making sure New Zealanders can afford to visit their GP.

So a policy promise has become a principle that may be phased in at some time, perhaps.

Corin Dann: And you’ve got a national cancer agency you’ve got to do?

David Clark: Yep, we’ve got lots of things we’ve announced– 

Corin Dann: Will we see that this term?

David Clark: We will see some progress in that regard. I’m having policy work done now to tell me what the best way is of delivering those things. We’re in government now, and that’s different. I do have access to a lot of researches, to the best international evidence, and I want to make sure that every dollar I spend goes as far as it can possibly go as Minister of Health and of course as Associate Minister of Finance.

Being in Government is different to being in an election campaign, and being Minister of Health is different to being Opposition spokesperson on Health. You don’t need the best international evidence to know that it is very difficult to meet all the demands of the Health portfolio.

There will never be enough money to afford everything that is wanted, especially with substantial spending commitments for other things like education, social welfare, housing, transport etc etc.

Clark has since confirmed that the Government won’t be able to meet all their promises ‘straight away’.

NZ Herald: Health Minister David Clark says coalition funding pressures have delayed cheaper doctors’ visits for all

Labour’s promise to cut the cost of going to the doctor by $10 from July 1 this year will now have to be phased in over time, Health Minister David Clark has said.

He points to Labour having had to meet the cost of new priorities from agreements with the New Zealand First and Green parties, Labour’s partners in Government, as the reason the full policy cannot be implemented from July 1 as promised.

Clark’s admission is the first time a minister has conceded that an election promise may have to be delayed.

Labour promised that from July 1 this year, the cap on doctor’s visits for very low-cost access practices would be lowered from $12 to $2 for those aged 13 to 17, and from $18 to $8 for patients age 18 and over (it is already free for 0 to 12 year olds).

For visits to other GPs it promised, from July 1, to reduce the average cost from $30 to $20 for teenagers and from $42 to $32 for adults, and to cap the maximum fee at $59 from $69.

The policy was estimated to cost $213 million a year.

Clark made it clear today the policy will now have to be phased in but has given no hint as to how.

“I am pursuing the principle that we get more affordable access to primary care in this country,” he told the Herald. “And what happens when you form a coalition Government is that you agree priorities and we are responding to the priorities as they are outlined in the confidence and supply and coalition agreements.

“I am pursuing cheaper doctors’ visit but I am signalling that that will be phased over time.”

Perhaps there will be a clearer signal of what sort of phasing in over what time in the budget.

I don’t recall Clark or Jacinda Ardern or Grant Robertson saying “we won’t be able to afford everything straight away” during the campaign. A lot of criticisms were directed at Steven Joyce when he pointed out a large difference between spending promises and available funds – the infamous fiscal hole.

Health can be a particularly emotive issue on a personal level, people’s health and lives are at stake.

We know a perfect ‘fully funded’ health system is impossible, but what we should expect from our politicians and our Government is honesty that not everything can be delivered due to competing demands.