Health Central gives you a bullet point summary of ‘bread & butter’ health budget that delivers $1.5 billion extra for health – more than half to fix hospitals and cover DHB debt. Does it fall short of the ‘transformative’ Budget many hoped for?

Vote Health total funding

  • Total funding up $1.52 billion for the 2018-19 year bringing the total health investment to $18.2 billion. (Last year the National Government increased funding by $825m to $16.7 billion)
  • Lion’s share of new funding is for capital investments in building and restoring hospital buildings ($750m) and boosting the support fund for DHBs in deficit (extra $100m)
  • Health may also have a share of this Budget’s ‘Tagged Contingencies’ Fund with the Budget documents noting that a number of initiatives – including commercially sensitive initiatives like funding for the planning and design of Dunedin Hospital –will be drawn from the fund.
  • ‘Tagged Contingencies’ also covers initiatives relating to “negotiations that have yet to take place, such as wage negotiations” which could include teachers, nurses, allied health and other health professionals.
  • An additional $46m has been allocated for ‘Tagged Contingencies’ for 2017-18 and $360m for 2018-19 to cover such initiatives (as well as other funding proposals or demands that arise between Budgets).

District Health Boards

  • The 20 DHBs get an extra $549m a year for four years ($2.2B) towards their operating costs to cover population change, wage and inflation costs.
  • The allocation is short of the $594m extra that the Council of Trade Unions/ASMS analysis calculated was needed to maintain current DHB services and cover population growth and inflation – but up $110m on the $439 million allocated in last year’s budget.
  • Plus an extra $31.5m a year for next four years ($126m) to keep up with demand for elective surgeries and other procedures

Capital works funding

  • The Government has committed extra $750m to capital expenditure in 2018-19 to tackle urgent building problems in hospitals around the country bringing total up to $967.3m
  • Projects getting share of funding include recladding of Middlemore’s mould plagued Scott building, ongoing Canterbury DHB earthquake repairs and service relocations and other DHBs’ building projects.
  • Health Minister says it is biggest capital injection in health for at least a decade and is only the start of a carefully managed programme to restore hospitals and health infrastructure. It does not include new Dunedin Hospital with the first funding stage for that to come out of ‘Tagged Contingencies’.

Workforce: pay equity & training 

  • No extra funding for health workforce training with funded places for GP trainees, new graduate nurses and midwives remaining the same and no extra funding for other health workforce training.
  • No extra funding pool announced for upcoming pay equity claims in the health sector – apart from last year’s settlement for care and support workers which Budget documents show was boosted in 2017-18 by an extra $22.8m on top of the $279m originally allocated.
  • But Budget 2018 does include a “Tagged Contingencies’ Fund (see Vote Health total funding above) including for ‘wage negotiations’.
  • And the ‘Supporting Equitable Pay’ funding stream now says its role includes supporting pay equity for not only last year’s care and support worker settlement but also mental health and addiction support workers.

Primary Health – General

  • Extending access to very low-cost GP visits to all Community Services Card holders at a cost of $58.6m in 2018-19 expanding to $100m a year from 2019-20 onwards
  • Also expanding eligibility for Community Service Card holders to all those receiving accommodation supplement or income-related rent subsidy
  • In combination the Government estimates this will make doctors’ visits cheaper by $20 to $30 for about 540,000 people.
  • But it falls short of Labour’s election policy of cutting GP costs by $10 a visit for all Kiwis and introducing $8 GP visits for community service cardholders which the Government has indicated will now have to be phased in
  • The Budget includes $1m in 2018-19 towards developing options for a free annual health check (including vision) for SuperGold card holders. (Part of the coalition agreement with New Zealand First)
  • And there is an extra $9.49m a year for the next four years in additional funding support for primary health to cover population growth and inflation costs. (Last year an extra $9.58m a year was allocated)

Primary Health – Child

  • Current free GP visits and prescriptions to children aged 12 and below are being extended to include 13-year-olds at a cost of $2.8m in 2018-19 growing to $4.9m a year from 2019-20
  • Resulting in free visits to an estimated 56,000 extra children. (Part of the coalition agreement with New Zealand First)
  • Extending nurse-led School Based Health Services to all decile 4 public secondary schools at a cost of $4.25m a year and improving access to an extra 24,000 students
  • Is short of Labour’s election policy to fund the equivalent of 240 nurse hours per 100 students a year (with GP support available) for all public secondary schools.

Mental Health & Addictions

  • Finance minister Grant Robertson indicated that funding gaps and needs identified by the Mental Health and Addiction Inquiry would be addressed in future Budgets
  • Meanwhile the government will be piloting a free counselling and evidence-based therapy service for young adults aged 18 to 25.
  • It will be modelled on NHS England’s Improving Access to Psychological Therapies and will have $2m put towards it next year and then stepping up to $4m the following year. (Part of the coalition agreement with the Green Party)
  • The already announced project to provide in-school mental health workers for primary and intermediate schools in the quake regions of Canterbury and Kaikoura will receive $700,000 this year rising to $7.3m in 2018-19 and $10m for the following two years.
  • What proportion of the extra $549m in DHB funding is ringfenced for mental health services is unclear at present.
  • The Budget documents note the new Government has reprioritised the $97m Mental Health Social Investment Fund Contingency fund allocated by the previous government.

Air ambulance services

  • Allocated $15m a year for next four years ($60m) plus $22.9m from ACC to strengthen air ambulance service and begin a programme of modernising helicopter fleet.

Maternity services & community midwives

  • Extra $9m this year and $25.9m for next four year (total $103.6m) to cover estimated increased births and women using primary community maternity services and increasing fees for lead maternity carer (LMC) community midwives.
  • Government press release says about half of that $103.6m goes towards an 8.9% catch-up increase in fees for over 1,400 LMC midwives to bring them in line with average increases for DHB-based midwives.
  • It says the funding will also provide $10m over two years to recognise the ‘self-employed nature’ of community midwives and $16m over four years to help midwives’ pay for colleagues to provide cover and ensure safer hours.
  • Vote Health document includes an extra ($33.6m) for National Maternity Services Settlement ‘drawdown’ from Contingency Fund that covers last year’s interim out-of-court settlement  for the Midwives’ pay equity claim.  It covers a 6 per cent pay increase in 2017-18 while new co-design model was negotiated.

Disability Support Services

  • Funding boosted for services to the 33,000 New Zealanders who receive assistance for physical, mental or sensory disabilities by $9m this year and $58m in 2018-19.
  • A total increase of $201m over next four years for disability support services to cover population growth, ageing and cost pressures. (On top of  last year’s Budget allocation of extra $222m over five years)
  • Also an extra $5.6m in 2018-19 and $4.8m following year for rolling out Enabling Good Lives initiative.
  • Budget documents show that to meet demand pressures on Disability Support Services in 2017-18 that $24m was transferred from other health areas including Public Health, National Māori Health Services and National Child Health Services.

National Bowel Screening Programme

  • An extra $13-$14m a year for next four years ($54m) to support the national rollout of the programme that is already a year behind original schedule because of IT issues and shortages of colonoscopists.
  • An additional $13m over four years is budgeted for IT requirements for the programme rollout
  • Health Minister says the extra total $67m budgeted for up to 2021-22 will allow the programme to be extended from the current five to 10 DHBs as well as help fund a national coordination centre, four bowel screening regional centres and a national IT solution.
  • The Ministry of Health website is still stating that all 20 DHBs are expected to be offering bowel screening by the end of 2021.
  • Budget documents show there was also a capital injection of $2m in the 2017-18 year for an IT solution for the programme.


  • From July 1 Pharmac is to manage all public expenditure on medicines –taking over responsibility from the DHBs of purchasing hospital medicines
  • The Government says this will lead to savings in the Combined Pharmaceutical Budget (CPB) of $29.3m in 2018-19 rising to $65.3m in 2021-22 (total budgeted savings of $194.7m)
  • It says Pharmac can use its purchasing power to deliver savings from within the Combined Pharmaceutical Budget “without compromising patient care”.
  • Pharmac says its overall funding will increase next year with (CPB) increasing $114.2m to $985m in 2018-19 with the transferral of hospital medicines budget. 

Coalition/Election policies not specifically covered in this Budget

  • Teen Health Checks for all Year 9 students (NZ First)
  • Re-establish the Mental Health Commission (NZ First)
  • Progressively increase the age for free breast screening to 74 (NZ First)
  • Fund an additional 100 Plunket and Tamariki Ora nurses (Labour)
  • Review funding of primary care system (Labour)
  • Review Youth One Stop Shop funding (Labour)
  • Set child obesity reduction target and rollout Waikato’s Project Energize programme. (Labour)
  • Review current funding model for residential aged care and update national baseline aged care standards. (Labour)


  1. Where is the total of how much the Government is spending on Health this year? A total. I’ve read story after story on the budget and the health spend but they only ever talk about increases and decreases and nowhere do the state the total. It’s extraordinarily frustrating. Surely the first or last line of any story about health spending in the budget should state the total money spent on health in the budget??????


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