Record investment in hospitals and health services

Hon Grant Robertson
Minister of Finance
Hon Dr David Clark
Minister of Health

12 May 2020

  • Record investment in DHBs of an extra $3.92 billion ($980 million per year)
  • One-off boost of $282.5 million (operating and capital) over three years for a planned care (including elective surgery) catch-up campaign following COVID-19 disruption
  • Ongoing funding of $31.350 million per annum ($125.4 million over four years) to manage planned care in line with demographic changes and increasing price levels

Budget 2020 delivers the biggest ever increase in funding for District Health Boards, as well as additional funding to deliver approximately 153,000 more surgeries and procedures, radiology scans and specialist appointments to help clear the COVID-19 backlog.

“All New Zealanders rely on our hospitals and other DHB services, and they’ve shown once again during the COVID-19 pandemic that they deliver world class care,” Health Minister Dr David Clark said.

“But we can’t take anything for granted. One of the key lessons of COVID-19 is the need for a strong and sustainable public health and disability system.

“As a country we have historically underinvested in Health. Budget 2020 continues this Government’s record of tackling that legacy of neglect.

“After what the country has gone through in recent months, and from the devastation we have seen to underprepared health systems around the world, it is absolutely critical that as a country we continue to invest in and build up the capacity of our health system. That is what the Government is committed to.

“We never know when the rainy day is going to come, but we need the world class health system in place for when it does - and that is what this record investment is all about,” David Clark said.
Finance Minister Grant Robertson said the different abilities of Governments around the world to respond to the global COVID-19 pandemic has highlighted just how important it is to have well-funded public services like our health system.

“We’ve seen before the damage that can be done when funding isn’t provided in areas like health and education during and after a crisis to cover population and cost pressure growth. It can take years to catch up and make sure everyone is receiving timely treatment.

“That’s why we’ve made a conscious decision in Budget 2020 to make sure critical public services keep getting the funding they need to keep running and providing the same level of services to all New Zealanders,” Grant Robertson said.

Budget 2020 puts an extra $3.92 billion dollars into DHBs over the next four years. That’s a record increase of $980 million dollars per year and takes the annual budget for DHBs to $15.274 billion. DHBs are also contracted by the Ministry on behalf of the Crown to provide additional national services.

“This funding will support DHBs to improve their financial sustainability and clinical performance. It will enable them to meet costs related to a growing and ageing population, as well as already agreed wage increases and inflation,” David Clark said.

“As a Government we’ve put a significant amount into DHBs to put them back on the path to sustainability. This is a long-term plan, as rebuilding our health system will take sustained investment over a number of years.
“While we know it’s challenging, DHBs will need to work on improving their financial performance as well as continuing to deliver quality care and improved health outcomes. I will be holding them to account on this,” David Clark said.

Minsters have also approved a one-off investment of $282.5 million (including $50 million of capital) in planned care such as elective surgery, radiology scans, assessments and follow-ups, and procedures completed in outpatients’ facilities.

This is on top of ongoing funding for planned care of $125.4 million (over four years), to cover the impact of demographic changes and increased costs.

“Although critical and urgent care continued even under Alert Level Four, we know that many New Zealanders had procedures delayed,” David Clark said.

“Our hospitals are now returning to a more normal level of service, but it will take time to recover and deal with the backlog.

“We don’t want people having to wait for care any longer than necessary. This extra investment in planned care will fund an estimated 153,000 surgeries and procedures, radiology scans, and specialist appointments over the next three years.

“We anticipate DHBs will work with local private providers to address waiting list backlogs as effectively and as quickly as possible.

“Budget 2020 backs our DHB doctors and nurses. It gives our DHBs and hospitals the resources they need to take care of New Zealanders,” David Clark said.


Last updated: Thursday, March 19, 2020

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