Health NZ crisis: ‘Not willing to pay for the nurses that we hired’

Following damning reports on Te Whatu Ora - Health New Zealand (HNZ) overspending alongside a ballooning deficit, Labour’s Health spokesperson says now is the time to invest rather than divest.

A recent briefing raised HNZ's forecast deficit from $1.4 billion to $1.76 billion, with the Central Health Agency aiming to return to a break-even position by 2026.

Four-hundred-fifty pages of recently released financial reporting has revealed HNZ's spending had dropped from $163m in July to $149m in August.

Speaking to William Terite on Pacific Mornings, Labour Health spokesperson Dr Ayesha Verrall said that the documents reveal what was suspected all along.

"That the increase in costs at HNZ has been driven mostly by an increase of nurses they hire.

"If you take yourself back a year or so you'll remember we were desperately in need of staff, particularly nurses, after Covid."

The briefing reported Health NZ had cared for more people than ever before from 2023 to 2024, with increased discharges and case loads, alongside higher staff levels, especially nurses.

Verrall said the international recruitment drive for nurses during Covid was successful.

"Those positions are needed and the 'so-called' deficit is a marker of how much extra the health system needs to be funded to deliver safe care."

Dr Ayesha Verrall. Photo /Supplied.

Verrall said according to the documents, Health NZ identified issues within their spending in March of this year, under the current government.

She said the bigger picture is that a majority of the deficit is related to nurse hiring and to a lesser extent, pay equity.

"This all came to light in March. The government then made its Budget at the end of May so they knew they could not afford the staff that they had at that point.

"But they decided not to fund it going into the Budget and that's why the health system is in a deficit position because of decisions that the Cabinet took.

"Dr Shane Reti knows this, he campaigned on there being a workforce crisis, and we did something about it but now he's not willing to pay for the nurses that we hired."

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A leaked document to RNZ informed the outlet of the proposed axing of staff and projects in disease prevention and detection, after being stripped of millions in funding.

Verrall said the government is using this deficit to justify health funding cuts when in reality the deficit represents a need for further investment.

She pointed out how the government's May Budget cut out the $330 million set aside for digital health initiatives over the past four years up to 2027-2028.

"All of the digital initiatives that we had underway would've meant that your care could be joined up more easily, you'd have information on your care as a patient, and your doctor's records would be joined up with your pharmacy records."

She said the key lesson to take away from this deficit is that for New Zealand's health system, it represents the gap between "the staff we need and the money we have".

"The government is using this deficit as a justification for making a lot of health system cuts.

"Our argument is that this is a sign that the health system needs to be invested in more.

"There's both a need for more investment and a need to reconfigure the system."