Health NZ Deficit Shrinks as Government Addresses Financial Challenges

Dr. Reti criticized the prior government’s handling of the health sector, citing poor oversight and governance as central to the financial woes.

Health Minister Dr. Shane Reti announced encouraging progress in Health New Zealand’s (Health NZ) financial recovery, highlighting a significant reduction in its projected deficit for 2024/25. The improvement follows extensive efforts to address what Dr. Reti describes as a financial crisis inherited from the previous Labour-led government.

Health NZ's revised budget for 2024/25 now forecasts a deficit of $1.1 billion, a significant reduction from the projected $1.76 billion deficit before the Government’s intervention.

“This progress reflects our commitment to restoring financial discipline and accountability in the health system,” Dr. Reti said.

Challenges of the Inherited System

Dr. Reti criticized the prior government’s handling of the health sector, citing poor oversight and governance as central to the financial woes.

“Labour’s botched reforms created chaos in the health system, leaving us to manage the aftermath. Despite the challenges, Health NZ and its workforce are making strides in resetting the system,” he stated.

Dr. Reti also addressed comments from former Health Minister Dr. Ayesha Verrall, dismissing her criticisms as unfounded. “Dr. Verrall remains unwilling to acknowledge Labour’s role in the crisis, despite clear evidence of mismanagement.”

Government’s Record Investment in Health

The Government is allocating $30 billion annually to the health sector, the largest investment in New Zealand’s history.

• The majority of funding is directed to Health NZ, with an emphasis on reducing waste and delivering tangible improvements in patient outcomes.
• Health NZ is targeting a return to budgetary balance by the end of the 2026/27 financial year.

“While Health NZ must live within its budget, it is crucial that this funding is used effectively to enhance clinical safety and improve patient outcomes,” Dr. Reti said.

Ongoing Reforms and Future Goals

The Government is focused on:

Streamlining Bureaucracy: Ensuring funds are directed to frontline care rather than administrative overhead.

Enhancing Patient Outcomes: Prioritizing clinical safety and equitable access to healthcare services.

Long-Term Financial Stability: Establishing a sustainable financial foundation for Health NZ to operate effectively.

Support for the Health Workforce

Dr. Reti praised the efforts of Health NZ’s leadership and staff in navigating the challenges. “Health NZ’s Commissioner, Chief Executive, and workforce deserve credit for their progress. I remain committed to supporting their work as we reset the agency to deliver for all New Zealanders,” he said.

Looking Ahead

Health NZ projects it will return to a balanced budget by 2026/27, signaling a path toward stability and efficiency in the health system. Dr. Reti emphasized that while significant progress has been made, much work remains to achieve a fully functioning and effective system.

“Our priority is to create a health system that meets the needs of every New Zealander, and I am confident that with continued focus and investment, we will succeed,” Dr. Reti concluded.

The Government plans to provide updates on Health NZ’s progress in future budgetary reviews, reinforcing its commitment to transparency and accountability.