This is based on Mountain Tui‘s earlier substack post.
In the days since the bombshell “firing” of Health NZ’s board and the appointment of a Health Commissioner, a lot has become clearer about PM Luxon and Health Minister Shane Reti’s claims.
How accurate were they, and what do you need to know?
Let’s examine the claims one by one.
CLAIM #1
Reti and Luxon said that Health NZ was unexpectedly blowing through its health budget to the tune of $130mn a month. Reti used the word “miraculously” to indicate it appeared out of nowhere
WHAT WE NOW KNOW (#1)
Luxon and Reti knew about the operational deficit in October 2023. Listen to Luxon in his own words on right wing media. He says he knew about the $130mn “deficit” last year.
Yes that’s right.
Luxon, Reti and Willis already knew about the projected “deficit”, yet appear to have underfunded Health NZ to the tune of $1.4bn in the May 2024 budget, and declared an unexpected, unforeseen funding crisis in July 2024.
CLAIM #2
Reti and Luxon called it a ‘deficit‘. Luxon also said no amount of deficit was acceptable to him.
WHAT WE NOW KNOW (#2)
Is it a deficit if you intentionally underfund Health NZ of what you knew it needed, before you set the budget?
Most of the extra costs were due to Health NZ successfully recruiting nurses to address our nursing shortfall. There were other items like backdated holiday pay and the like which was on the agenda even last year.
Earlier in the year, Reti even said: Health NZ “delivered a financial break-even result in its first year after establishment”
They were alerted to the context through Health select committees earlier in the year, from public reports, Health NZ’s annual report, and presumably from the Health NZ Board – most of whom had already left and resigned by the time the Board was “fired.”
NOTE: This is ALL against the backdrop of the government admitting we still have a shortfall of ~2500 nurses, including 500 in mental health.
CLAIM #3
Shane Reti and Luxon claimed that Health NZ had 14 layers of management, and the distance between the frontline and decision makers contributed to the deficit. When asked what those 14 layers were, Reti looked down and indicated it was so complex, he couldn’t remember it all.
WHAT WE NOW KNOW (#3)
There are not 14 layers of management spread across the whole health system,. Instead, the Government put out a list that included Boards of Directors, patients, doctors, nurses and supervisors who are basically clinicians who have oversight of team members etc. in a grossly misleading representation of Te Whatu Ora / Health NZ’s structure and operations.
Some roles are clearly governance roles including Chairpersons and Directors, executive management roles are the CEO, then you have executive management support in the form of Chiefs of Staffs, and the end people (patients). That 14 is easily whittled down to 8 just on paper. On top of that many roles are often performed by the same person, smaller regions will have less roles than larger more complex organisations, and realising most on that list are clinicians, that 8 looks more suspiciously like 5-6. Reti says his target is six.
In their quest to justify the abolishment of the Health NZ board and appoint the Dr Levy to the role of Health Commissioner, the government made some sloppy miscommunications.
CLAIM #4
Reti claimed the primary reason for the extra costs was the distance between frontline staff and management. He built on the myth of 14 layers of management (see Claim #3) to explain what the root cause of the “blowout” was.
WHAT WE NOW KNOW (#4)
One small wrinkle. Shane Reti, and his boss, PM Luxon, already knew about the reasons and projection for the deficit last year. (See Claim #1)
Further, it wasn’t due to the non-existent 14 layers of management (See Claim #2) It was due to a variety of reasons, and primarily, reducing nurse vacancies from double digit vacancies to single digit % to meet health system needs.
CLAIM #5
Luxon claims his government is spending record amounts on Health NZ.
WHAT WE NOW KNOW (#5)
“The new government’s reduction in real terms spend per person in the next twelve months, and the treasury’s current forecast to remain below 2023-24 levels in real terms per person for the next 4 years, is well below anything achieved this century in New Zealand or comparable countries.”
Source: Peter Huskinson
CONCLUSION
There is more, but is that enough?
That pesky health system, hiring nurses, and doctors and carrying out procedures for New Zealanders is a real nuisance it appears, tongue firmly in cheek.
Finally, let’s recap where some of the money is going –
- $4bn for potholes, including a 24 hour pothole service proudly championed by Mr Simeon Brown
- ~$3bn for landlords to help them keep their investment properties for longer
- $12bn in tax cuts – the majority which went to middle income and above classes, and which the govt borrowed $12bn for.
- $153mn for private charter schools that compete with our public education sector and teachers
- $60-80mn for David Seymour’s Ministry of Regulation to do as he pleases
- $1.9bn for a private-public-partnership build for a mega prison and more prisoners etc.
- $5mn for a pilot military style boot camp, costing $525,000 per youth, that the government has been told doesn’t effectively work, and is at risk of brutalising youths further
