Health funding ‘crisis’

Health spending has always been under pressure.Is it now a crisis? ‘Crisis’ suggests an unusually critical situation, but health under funding has long been an ailment.

Health care has increased substantially over the last half century, but so have the costs. Drugs and technology have improved and cost a lot more, and a growing and ageing population puts further pressures on budgets.

What the Government does on health in next month’s budget will be interesting. More money is likely (the previous government kept spending more) but it is unlikely to be enough.

The prime Minister and the Minister of health have both been sending out signals that spending may be compromised. They are claiming health ‘underfunding’ is worse than they thought.

Dave Armstrong has some details in Toss a healthy bit of funding at DHBs and voters will turn a blind eye to almost anything

I’m not sure about that, health doesn’t seem to play an obviously significant part in elections.

It has also been revealed that necessary spending on infrastructure has been delayed by a number of district health boards because they were under such pressure from the previous government to show an operating surplus

That’s why buildings at Middlemore Hospital with toxic mould and sewage leaks behind asbestos walls will need $123 million to be repaired. It seems that the mantra of the last government regarding health infrastructure was ‘a stitch in time causes an operating deficit that looks bad so please don’t ask for money or there’ll be trouble’.

Middlemore is just one example. The Clinical Services block at Dunedin Public Hospital has had leaking and asbestos problems for years. A replacement hospital in Dunedin has been delayed, and now it is over to the new government to try to keep an election promise.

Even though the Labour Party pledged $8 billion to health during the election campaign, Health Minister David Clark thinks that won’t be enough. It is estimated that $14 billion will be needed over the next 10 years for infrastructure alone.

Jacinda Ardern has found health finances are even worse than she expected. She identified $10 billion worth of capital expenditure needed whereas the previous government set aside just $600 million.

I don’t think it is unusual for incoming governments to discover costs that they hadn’t taken into account when making election promises.

The previous National government would rightly argue that it spent billions on health. Spending increased under its watch, but was it enough to meet rising demand? With failing infrastructure and frustrated salary workers who haven’t had a raise of ages, I would say no.

Despite disingenuous claims by Labour health funding kept increasing under the National government. But health funding is never enough.

So what’s the solution? Ask most health professionals and they would suggest a substantial investment in infrastructure and pay rises for hospital staff, especially nurses and those at the bottom. But given about 60 per cent of health expenditure is for salaried staff, that is a considerable cost.

Nurses are currently negotiating for wage increases, and are threatening to go on strike.

And that is the problem for this Government. They may want nurses and others to be paid fairly, but where is the money coming from? During the election campaign, Ardern and Grant Robertson were at pains to point out they wouldn’t touch the corporate tax rate or John Key’s 2008 tax cuts for the wealthy.

This reticence to change the wealth distribution might have helped them get elected but now they either have to find the money elsewhere or disappoint underpaid nurses, many of whom would have voted for them.

So that’s the unenviable health dilemma that this Government faces over the next three years.

The immediate dilemma is the budget currently being finalised. We will find out how much of a boost health funding will get next month.  The only certainty is that it won’t be enough.

On canning Kidscan funding

RNZ: KidsCan may lose govt funding: ‘Children will go hungry’

The charity, which has been in operation for 12 years, provides food, clothing and healthcare to 168,000 children across 700 New Zealand schools.

Executive Julie Chapman told Checkpoint with John Campbell she was told last week by Oranga Tamariki / Ministry for Children that it would lose its government funding – $350,000 worth – on 1 July next year.

School decile system to be replaced

Education Minister Nikki Kaye announced today that the Government will replace the school decile based funding system with a ‘Risk Index’. They say that no school will get less funding, but some will get more.

I hope it doesn’t just replace one system of bureaucracy with another.

Time will tell whether this planned change will survive past the election if a new Government comes into power.

Improved funding for children at risk of not achieving

Education Minister Nikki Kaye today confirmed the Government will replace the decile system for schools with targeted funding to better support those students most at risk of not achieving.

“For too long schools have been stigmatised and wrongly judged by their decile number,” says Ms Kaye.

“Children and young people deserve to take pride in their school and we need to better target funding to where the need is greatest to support all children to achieve.

“Today I’m announcing that the Cabinet has agreed to replace the decile system with a Risk Index that allows us to better target funding to schools with children and young people most at risk of not achieving due to disadvantage.

“We will also be replacing the equity index used to allocate disadvantage funding in early childhood education with the Risk Index.”

Decile funding currently accounts for less than 3% of a school’s resources.

“Rather than allocating this funding on the basis of neighbourhood characteristics as the current decile system does, the Risk Index will instead provide fairer funding that better reflects the needs of children in our schools and services.

This will mean extra resources are better targeted to support schools to lift achievement.”

The specific factors to be used in the index are subject to further analysis before being finalised. But, they will be the indicators which evidence tells us have the greatest influence on student achievement.

“However, I’m pleased to be able to confirm that no school, early learning service or ngā kōhanga reo will see a reduction in their funding as a direct result of this change,” says Ms Kaye.

“In fact, we expect some will gain significantly.

“This is the first major change to be announced as part of the Funding Review, and I would like to acknowledge the incredible work by my predecessor Honourable Hekia Parata who initiated this important piece of work.

“As part of the Review the Government has been working with education leaders, such as those in the Ministerial Advisory Group for the Funding Review and a Technical Reference Group, which have advocated for change and further funding for disadvantage.

“With any system, whether it’s with decile or the Risk Index it’s very important that children and young people’s privacy is protected at all times. The way the system is being designed it will not be possible to identify which children generate the additional funding.”

There will be further engagement before any changes are implemented, although it’s likely the new model of funding will take effect from 2019 or 2020.

“Stripping out decile will change how schools are judged,” says Ms Kaye.

“We are working on a number of initiatives to make it easier for parents to find and assess information about the quality of schools.

“This includes a project with ERO that improves their reports and key information as well as making it more accessible to parents. This will involve some investment in greater online tools.”

Further work on other aspects of education funding is also ongoing. The Ministry of Education is due to report back later this year on the other parts of the Funding Review.

Related Documents

1 News:  Teachers union wants schools ‘underfunding’ dealt with as decile system scrapped

The primary teachers union says it’s big concern is underfunding for schools following the Government’s announcement that the controversial decile system will be replaced with a new rating system for funding.

The unions are largely welcoming the idea, but worry about the funding.

“Our big concern is obviously the underfunding that we have currently in the system. And that’s what we really want to see addressed,” said Lynda Stuart, NZEI president.


Morgan says he will spend $5 million

Big spending campaigners didn’t have a good return on their investment last election, with Colin Craig’s Conservatives coming up a bit short of the threshold and Kim Dotcom’s Internet Party spending even more and having less success, in fact he dragged the Mana Party backwards and out of Parliament.

Gareth Morgan is suggesting even bigger numbers for his The Opportunities Party, but he has a big political hill top climb.

NZ Herald: Morgan prepares to spend $5m

Gareth Morgan expects to spend up to $5 million of his own fortune on his political party – saying he is “donkey deep now and has to keep going”.

“I have been surprised [at the cost]. The sad reality of politics is you have to have money to play. And I don’t like that,” Morgan told the Herald.

The media political machine hasn’t really warmed to Morgan so he will find it difficult to get the exposure he needs.

Morgan said a lack of money particularly excluded the young, many of whom can’t afford to take time off work to campaign, he said.

The deck is stacked against newcomers to politics. Incumbent parties and sitting MPs have effectively been campaigning for months already on full MP pay and using their free travel perks.

University of Otago Faculty of Law professor Andrew Geddis said New Zealand was “pretty much in the middle of the road” internationally in terms of controls on fundraising and spending, with no spending limits in Australia and the US.

Spending limits here cover advertising, but not other campaign expenses like opinion polling, travel and staff.

Incumbents exploit taxpayer funded polling, travel and to an extent staff.

Geddis said there wasn’t a strong link between spending money and winning in New Zealand, however there were high entry costs for new parties and low levels of state funding for parties (the Greens have called for an inquiry to investigate state-funding for parties).

“Voters know unless a party has a realistic chance of making the quite high 5 per cent threshold, a vote for them is wasted. It’s not just money that achieves success, it’s been seen as potentially successful.”

A lot of money seems to be essential, at least for the media to pay any attention to a new party or to different approaches to campaigning and to politics.

But it nowhere near guarantees success.

Any other party wanting to get anywhere near the ridiculously high MMP threshold (kept in place by incumbent parties to protect their positions and keep new parties out, another substantial advantage they give themselves) has a huge hill to climb.

TOP has the finance, but they don’t yet have any candidates that interest the media.

What Morgan needs to try and find is a party leader who is competent, ambitious and confident, but also is different or controversial enough to attract attention from the headline seeking media. He isn’t that person and knows it.

Otherwise the incumbent party advantages and the lack of media opportunities for new parties the political establishment is very difficult to upset. There’s some irony in the media reluctance to provide balance, because they could help a political revolution (or at least an interesting addition) happen.

Bryce Edwards’ Political Roundup  also looks at TOP:  Is Gareth Morgan’s TOP really an anti-Establishment party of outsiders?


Clark v Coleman on mental health funding

Labour’s health spokesperson David Clark versus Health Minister Jonathan Coleman in Question Time on Tuesday – this approach doesn’t help the mental health debate.

Health, Minister—Statements on Authors of People’s Mental Health Report

11. Dr DAVID CLARK (Labour—Dunedin North) to the Minister of Health: Does he stand by his statement about the authors of the People’s Mental Health Report, “they’re very left-wing, anti-Government protesters”; if not, when will he apologise to the 500 people who wrote their own stories about experiences with the mental health system as part of the report?

Hon Dr JONATHAN COLEMAN (Minister of Health): Yes, and my statement distinguished between the genuinely motivated story submitters and those ActionStation organisers with some political agenda. My quote was: “When you look at the people behind it, [you know] they’re very left-wing, anti-Government protesters.” As I say, ActionStation is back on Thursday with another, separate, anti-Government protest within the health area, and it could be back week after week with different topics. And just for the record, the ActionStation campaign coordinator is Mr Rick Zwaan, the Green Party’s Wellington election campaign coordinator, who used to work as Kennedy Graham’s researcher. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! Supplementary question, Dr David Clark. [Interruption] Order! I have asked for less interjection from everybody so that Dr David Clark can ask his supplementary questions.

Dr David Clark: Has he read the report; if so, does he accept that its aim, as recorded in the executive summary, is to give space to the stories of what is really going on and going wrong in our mental health services?

Hon Dr JONATHAN COLEMAN: Yes, I have read the report, and especially the executive summary, the first line of which is a totally false premise. It talks about $140 million being cut from health funding. Well, actually, health funding has gone up by $300 million, which kind of proves the point that this is a political document.

Dr David Clark: Does he think the contribution of Robbie, who described support services as expensive and inadequate, and which, he says, “almost drove him to take his own life”, should be dismissed as the experience of a left-wing, anti-Government campaign?

Hon Dr JONATHAN COLEMAN: I have already answered that. Look, I think Robbie’s experience is worth listening to, but that does not change the fact that this report is produced by a group of people who are permanent anti-Government protesters. If the member does not believe me, go and look at their website. They will be back here, week after week, on subject after subject after subject, because they do not like the Government.

Dr David Clark: Does he think the contribution of Mike King, who “describes despair and hopelessness in the face of inadequate access to mental health services”, should be dismissed as the experience of a left-wing, anti-Government campaigner?

Hon Dr JONATHAN COLEMAN: Look, I think the member needs to speak to Mrs King about how you think on your feet. I have answered that question already. The organisers are from ActionStation, and it is the permanent anti-Government, left-wing protester. Mr King is a very good man—Mike King, as opposed to Mrs Annette King—who is genuinely motivated, and I do not detract from his efforts. But, as I say, when you have people like Mr Rick Zwaan, who used to work for Kennedy Graham, and his friends from the Green Party, I think it is pretty obvious that this is political.

Dr David Clark: Does he think the contribution of “the many parents who submitted in regard of their children’s experience of huge waiting lists and lack of funding” should be dismissed as the experience of a left-wing, anti-Government campaign?

Hon Dr JONATHAN COLEMAN: I point out to the member that he does not have to take all his supplementary questions, and if he cannot think of new material in response to the answers, he should just stop. [Interruption]

Mr SPEAKER: Order! We will deal with them one at a time.

Chris Hipkins: I raise a point of order, Mr Speaker. For two answers in a row, the Minister began by insulting the questioner rather than addressing the question. But the main substantive point is that despite the abuse in that last answer, he did not even address the question that was asked.

Mr SPEAKER: On this occasion—[Interruption] Order! I have been increasingly worried about the interchange between these two members and some of the answers that have been given on occasion by the Hon Dr Jonathan Coleman, but, on this occasion, when I consider the three questions that were asked, they were, effectively, the same question each time. Therefore, I can understand the frustration of the Minister in having answered the question the first time—he, effectively, gets the same question for the next two occasions.

Dr David Clark: I raise a point of order, Mr Speaker. That question, in my view, was not addressed, because he had talked about ActionStation, which is the compiler of the report. I am asking a specific question about the comments from the parents within the report. That is a very specific and non – politically loaded question.

Mr SPEAKER: Order! I would like to assist the member, but when I consider the answer that was given to, I think, the second supplementary question, that, effectively, was an answer that was then quite suitable for the rest of the questions the member asked, which were, effectively, just drawing on the experience of someone else within the book. The Minister was quite clear in saying he is not in any way critical of the experiences that were detailed in the report; he was certainly critical of the authors who put the report together.

Hon David Parker: I raise a point of order, Mr Speaker. With respect, is the problem with that not that the Minister is trying to write this off as being a left-wing conspiracy—that is the essence of his answer? I think it is quite proper for members of the Opposition to put instance after instance after instance that paint a different picture. I think the Minister should have to address each of those instances, rather than just cast aside a political insult telling him he should learn how to ask different questions.

Mr SPEAKER: Order! I do not agree that it was a political insult. The question was answered. There was no attack on the various contributions that were made within that report by the Minister. There was certainly a feeling that the authors were not of the same political persuasion as the Minister. That is acceptable.

Dr David Clark: To clarify—

Mr SPEAKER: No. [Interruption] Order! [Interruption] Order! Would the member please resume his seat. [Interruption] Order! Would the member please resume his seat. I have ruled on that matter. The member is now starting to challenge the Chair and debate with the Chair. That in itself will lead to gross disorder in this House. Question No. 12—Melissa Lee—[Interruption] Order! [Interruption] If I hear a further interjection from Carmel Sepuloni while I am in the Chair today, she will be leaving the Chamber. She has been consistently interjecting throughout question time in a very—[Interruption] Order! If the member wants to go now, I can make that arrangement very easily. I expect cooperation, particularly from whips, and the level of interjection that has been coming from Carmel Sepuloni throughout question time is unacceptable. When I rise to my feet, for those interjections still to continue is just not acceptable to this House.


The tweet/debunk cycle continues

Donald Trump sulked during his media conference with Angela Merkel and waiting until he was in the ‘safety’ of his twittersphere before taking a swipe at Germany.

Trying to circumvent unfavourable media coverage by tweeting directly to his base audience is one thing.

But dirty diplomacy is another. He is looking like a gutless keyboard warrior.

And as has become common the challenges to his claims have flowed.

NZ Herald: German Defense Ministry contradicts Trump, says it doesn’t owe US money for NATO

President Donald Trump’s Saturday tweet accusing Germany of owing the United States “vast sums of money” for NATO might have been an attempt to put pressure on the European ally. But Berlin has rejected his claim while also questioning his understanding of NATO finances.

Yesterday, German Defense Minister Ursula von der Leyen called the criticism “inaccurate,” without mentioning the president’s name.

“NATO does not have a debt account,” von der Leyen said, according to her ministry. In reality, NATO has only a small logistical budget, which relies on funding by all member states. The vast majority of NATO members’ total resources are managed domestically, however.


The criticism echoed other experts, including former US ambassador to NATO Ivo Daalder. “Trump’s comments misrepresent the way NATO functions,” Daalder told The Washington Post on Saturday. “The president keeps saying that we need to be paid by the Europeans for the fact that we have troops in Europe or provide defense there. But that’s not how it works.”

Trump is not  just gutless, he is also often inaccurate.

Israel UN unravelling

Israel is threatening to cut funding of the United Nations, and says they won’t fund an organisation that works against them.

Some US politicians have threatened similar if they don’t get their way.

Is this the beginning of the end for the UN? It will be next to useless (more so than now) if any country that gets in a huff about being criticised pulls out.

RNZ: Israel cuts $6m in United Nations funding

The move is part of its protest at a Security Council resolution demanding an end to Israeli settlement building on land Palestinians want for an independent state.

Israel’s mission to the United Nations said funding would be cut to UN bodies it described as “anti-Israel,” including the Committee on the Exercise of the Inalienable Rights of the Palestinian People and the Division for Palestinian Rights.

“It is unreasonable for Israel to fund bodies that operate against us at the U.N.,” Israeli UN Ambassador Danny Danon said in a statement.

“The U.N. must end the absurd reality in which it supports bodies whose sole intent is to spread incitement and anti-Israel propaganda.”

So Israel only wants allies in the UN and not critics or countries that may try to hold them to account?

The Israeli mission said it would move ahead with further initiatives aimed at ending anti-Israel activities at the United Nations after Trump takes office on 20 January.

There’s an implication there that Israel expects the US under Trump’s leadership will act likewise.

If Israel and the US cut UN funding and ignore resolutions they don’t like it will further legitimise defying and ignoring the UN, increasing it’s impotence.

If it ain’t fixed break it some more.

RNZ funding questions

Radio New Zealand (and other media) have justifiably been praised for their coverage of the earthquakes this week. In times of disaster most trivia gets sidelined as media rises to the occasion (except for a few diversions on cows and paua).

RNZ is state funded and the Government purse strings have been tightened over the past few years. Their funding in relation to their earthquake coverage came up in Parliament yesterday.

Garth Hughes took the opportunity to push for more money for RNZ – at a time when Government funding of things like rescuing Kaikorai from devastation and isolation and fixing a few roads and railway lines may be a tad more important.

Bill English responded by saying that RNZ had used the money it does receive wisely, and demonstrating the ability to use the money it receives well does not on it’s own justify giving them more money.

MediaSupport for Media and Radio New Zealand Funding

9. GARETH HUGHES (Green) to the Minister of Broadcasting: Will she join with me to acknowledge the work of all media in New Zealand, which is so important in times of natural disaster and crisis; if so, will she consider increasing our public broadcaster Radio New Zealand’s funding in Budget 2017?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Minister of Broadcasting: Yes, I do agree with the member. The media has done an excellent job of the vital task of keeping the public informed about what they should do at a time of stress. In terms of Radio New Zealand’s (RNZ’s) funding—and, of course, Radio New Zealand, uniquely among media organisations, has a guarantee of revenue for future years, something that many media organisations would regard with envy. However, any bids will be considered in due course as part of the usual Budget process.

Gareth Hughes: How long does the Minister think our only public broadcaster, Radio New Zealand, can continue to provide the high standard of broadcasting we have seen in the past few days, when its funding has not been increased for 8 years?

Hon BILL ENGLISH: Well, clearly up until now it has done a very good job. I have not seen any noticeable deterioration, in fact, I have seen some improvements in the broadcasting of Radio New Zealand on the guaranteed funding that it has, which, as I said, makes it unique among media organisations, a number of which are fighting simply to stay alive.

Gareth Hughes: Given the Minister’s comments around the ability to lodge a Budget bid, is the Minister concerned Radio New Zealand did not put in a funding bid in the last Budget round, with the chairman describing it as: “pointless beating your head against a brick wall of reality.”?

Hon BILL ENGLISH: No, I was not disappointed at all. I know for public organisations it can be a sort of automatic reflex that they bid for more money just because they had some last year and think can do more good next year. In the case of RNZ though, over a number of years it has changed with the times. I am particularly complimentary of its website development. It sees itself now less as an owner of a broadcasting system and more as a content provider. I am sure that the wider media sees benefit in broadcasting content of the quality of RNZ’s.

Gareth Hughes: Given the excellent work that Radio New Zealand has done in the last few days despite a real-term funding cut of $4 million since this Government came to office, would the Minister encourage Radio New Zealand to put in a Budget bid for the next funding round?

Hon BILL ENGLISH: Well, not on that basis. I mean, we do not give a public organisation more money just because it has demonstrated its ability to use the money it has. If there is a greater need for the long-term sustainability of the organisation then I am sure the board and executive of Radio New Zealand will see merit in putting up a bid. Equally, we also try not to give money to organisations where their services habitually fail, because that would also be rewarding organisations, rather than just applying money to obvious need.


Boxing bout bid bombed

Duco Events has withdrawn their bid for Government funding for the upcoming Joseph Parker boxing bout. I can’t remember the name of his proposed opponent, and I have no idea where the bout fits into the tangled web of world boxing championships titles.

Duco co-owner David Higgins said issues around the funding bid had become “political dynamite” and there had been a lot of criticism on social media.

Perhaps they misjudged public sentiment about boxing. Two people trying to hammer shit out of each other has gone out of fashion as a sport. And public sentiment about corporate handouts is a bit shaky too..

It certainly looks like Duco either hadn’t done much homework on what sort of even qualifies for ‘Major Event’ funding, or thought that their event would be looked on differently than the type of events that usually queue up for years to get a bit of financial assistance.

I suspect that while some in Cabinet support the event that some were also quite averse to giving a handout to an event that may have lasted for half an hour, or may have lasted for half a minute, and would have had far more than half their voters giving them a major ear bashing.

Perhaps the bid was never expected to succeed in getting a handout – it has succeeded in gaining some more publicity for the bout.

Talking about the bout, can anyone explain where in the boxing ‘championship’ pecking order this bout is? I have no idea, and I must admit I’m barely interested.

‘War on drugs’ funding boost

The Government has announced a $15 million boost for anti-drug initiatives.

Stuff: PM John Key announces $15m of initiatives for war on P and other drugs

The Government has announced the funding for 15 anti-drug initiatives, coming from money and assets seized from criminals, as part of its Tackling Methamphetamine Action Plan.

User pays initiatives.

The funding includes $3m for a joint initiative by police and health officials to reduce demand for P in Northland, as well as a $2.1m programme to better identify P use among new prisoners and trial a treatment programme. 

The Government is also spending $2m to tackle the flow of P into New Zealand from the Americas and Asia, along with $732,000 to get more intelligence on overseas gangs importing the drug.

Key said official advice from surveys suggested the number of people using P was declining.

However, extra resources for police and Customs had led to more high-profile seizures, while those “at the hardened end” were using more of the drug.

“Certainly, meth has become I think a drug of choice of some of these more hardened users.”

Key said New Zealand’s status as one of the most expensive places to buy P was a “huge incentive” for those who wanted to import or manufacture the drug.

Limiting supply pushes up prices which makes it more lucrative to supply. A vicious supply circle?


NZ Drug Foundation executive director Ross Bell said the Government appeared to have a better balance between law enforcement and health-based interventions than in previous announcements.

“It’s not just all about law enforcement, it’s not all about getting tough on gangs, it’s not all about stopping drugs at the border – you have to provide help to people who need it.”

However, Bell said drug and alcohol treatment services had been underfunded for many years, and “a much more significant injection” of cash was needed to tackle the demand for drugs.

“As long as there are people who are demanding drugs, people will find a way of supplying those drugs,” he said.

Keeping people off drugs and getting addicts off drugs must be the most important focus.