2500-3000 more healthcare staff expected to be fired, as Shane Reti blames Labour for a budget deficit that happened on his watch
2500-3000 more healthcare staff expected to be fired, as Shane Reti blames Labour for a budget deficit that happened on his watch
When will the old trick of blaming Labour end, against all odds and all facts?
Long Read
Key Summary:
Although National increased the health budget by $1.4 billion in May, they used an old funding model to project health system costs, and never bothered to update their pre-election numbers. They were told during the Health Select Committees earlier in the year their budget amount was deficient, but they ignored that. This is likely to have resulted in a significantly underfunded health budget. In this regard, they have form. Simeon Brown’s pre-election road budget is estimated to be out by 100% according to Waka Kotahi.
And it has been clear since at least April, that the Government has been telling Health NZ to cut costs dramatically - hospitals were asked to cut over a hundred million and to freeze hires, stop hiring local graduate nurses, cut staff, and cancel / defer technology, and investment projects.
Health NZ’s Board had already mostly resigned and left, leaving only two, as I started reporting on last week. It was embarrassing for the Government. Reti didn’t front questions about it, leaving Seymour to answer.
Yesterday’s latest move to remove the Board and put in a ‘Commissioner’ that wants to run health care “like a business” and has been called “top-down, controlling and destructive” is perhaps exactly what Luxon and Reti had in mind as they seek to strip out 2500 - 3000 more staff and budget from NZ Health.
Finally, despite Luxon and Reti’s rhetoric, analysis from healthcare specialists shows that National’s per capita spend on health in NZ, and projection over the next four years is, the lowest this century for NZ or comparable countries.
Takeaways
Today, I watched the Luxon / Reti press conference on the extraordinary removal of Health NZ’s board, so you didn’t have to.
Here are a few key takeaways from the press conference.
Reti expects 2500-3000 more Health NZ staff to be fired. Shane Reti called them back office staff. That term is nebulous at best, but under this government, it’s become manipulative and harmful. Under National, Te Whatu Ora “back office” roles include policy, research, and suicide prevention. There is a place for efficiency anywhere, but this appears to be a cost cutting exercise from a government that has rapidly lost control of its department and budget.
The $1.4bn deficit that Stuff blared haplessly in its headline occurred on the National Government’s watch. Thomas Coughlin confirmed that in March/April of this year, MPs were reporting no deficit for Health NZ. Reti claims previously projected savings didn’t eventuate, and only came to $54mn. After the budget announcement, in the space of 3.5 - 4 months Reti is calling out a $1.4bn deficit, based on an operating difference of $130mn a month i.e. a difference between Health NZ spend and Health NZ’s allocated budget.
That’s a -$2bn net difference from their April numbers and an extraordinary level of incompetence. Reporters asked if the National government was going to take responsibility for that. Credit to Coughlin for adding the nuance in his questions and article. Stuff driving right down to the bottom of the barrell in comparison for a copy and paste of the Government’s claims.
Reti kept hiding behind a few phrases, including “operating model,” and “Auditor General,” saying no-one knew what was happening until the deficit “miraculously” appeared. I find it very hard to believe that any large organisation with Te Whatu Ora’s history and operating systems was not accruing and reporting costs.
We know for a fact that the govt has been putting significant pressure on Health NZ over the last few months to cut staff, freeze hiring, ask for money, freeze nurses, turn patients away, cut millions of dollars across hospitals, as GPs reach boiling point and Reti ignored calls from doctors for additional funding and to continue hospital renovations he put on hold.
We also know for a fact that they were told about the significant cost pressures related to salaries, staffing, elective surgeries, backpay owed etc. was significant and needed addressing.
It’s far more likely that they underfunded Health significantly, realised it, then tried to order cuts to stem the difference. But as health practitoners increasingly sounded the alarm, and most of the Health NZ Board members resigned and left, this is the ‘solution’ they came up with -
Invent a crisis, blame Labour, and buy themselves time by pretending they are helping to solve a problem they created in the first place. Meanwhile the real issues are ignored - chronic staff shortages, failing practice and funding models, GP wait times and capacity, doctor numbers and training, crumbling hospitals, nursing shortages, increased infrastructure deficit, mental health crisis, and falling patient care.
I also welcome any media outlet to ask the Government where the billions Labour committed to hospital builds has gone.