Shane Reti: Health Minister on the health system costing $30 billion in 2024

The Health Minister believes Health NZ is funded enough, it's just not spending it well. 

Treasury warned that health spending's been increasing rapidly due to demographics, with costs increasing faster than inflation due to an ageing population. 

The total health system's estimated to cost $30 billion this year. 

Documents show Treasury suggested further cost cutting at Health NZ could require changes to services. 

Shane Reti told Mike Hosking there are clearly some vacancies to fill on the front-line, and some back-office positions that may not be needed. 

Health now accounts for 7% of GDP, which Treasury predicts is likely to reach 10% by 2061. 

Reti says they want to be wise users of taxpayers' money. 

He says New Zealand generally sits in the middle of the OECD around its spending compared to GDP. 

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Episode Transcript

Speaker 1 (00:00):
So some fascinating new numbers for you this morning to
explain just how Gargantua and our health services Health New
Zealand employees eighty two thousand, eight hundred full time equivalent staff.
That's one point five percent of the entire population. One
on every thirty members of the workforce in this country
works for health. The cost of all that's thirty billion.
Big question Treasury is trying to answers is it funded adequately?

(00:23):
The Health Minister Shame readies with us on the Shame
morning to you.

Speaker 2 (00:26):
Yeah money mate, now that's much.

Speaker 1 (00:27):
I think that line from the Prime ministery a couple
of months ago, thirty billion is enough. Do you stand
by that?

Speaker 2 (00:33):
You so do, As you've heard from the tuition up.
It's just that we're funded enough, we're just not spending
it well. I mean put that in context. Every health
system in the world would like to have more funding,
as would I but for the key services we need
to deliver, as you correctly pointed out, for the biggest
organization in New Zealand, probably one of the top six
between Australia and New Zealand. It's a big organization and

(00:54):
so thirty billion will help those deliver cour services.

Speaker 1 (00:57):
Is it so gargantua and no one's quite got a
hand on its totality.

Speaker 2 (01:02):
Oh that's a very good point, And I think the
answer that would be yes, that's what happens when you
throw twenty DHBs together on short notice in the middle
of the pandemic. How did we think that was going
to play out? You know, that's the structure we've got.
That that's the cards we've got. We've just got to
play them really well. But yes, it is a big entity.

Speaker 1 (01:19):
And when you look at the size of the entity
serving five million people, does it seem too big?

Speaker 2 (01:26):
Look, that's something that as you'll be aware of, the
Commissioner's working on with the statements we've made around how
we're going to get back to fiscal stability, around reducing
some of that back office because it is just too big.
I think my aster that would be a yes, it
probably is too big, but we probably had people in
the wrong places our front line. Clearly, we've got some
vacancies we need to fill, and we have some positions

(01:48):
in the back office that we may not need so much.

Speaker 1 (01:50):
The Treasury suggest it could cost us ten percent of
GDP by twenty sixty one. Is that too much? Is
that a worry.

Speaker 2 (01:58):
Again in that context that you could fill Health with
as much as you'd like to give it. We want
to be wise users of taxpayers money. If we look
at where we position in the OECD for the amount
we spend on GDP, we generally sit in the middle.
We box above our weight. But of course you'd always.

Speaker 1 (02:15):
Like more this Treasury stuff I'm reading this morning, top down,
bottom up? Do we trust Treasury? The Treasury actually know
what they're doing or we're just just throwing darts boards here?

Speaker 2 (02:25):
Oh, Treasury are very detailed, particularly around budget time, very
detailed around what costings might be if they start a
year out, if not further. And so the bottom up
was Health New Zealand approximation and the top down was
Treasury's approximation. And it, as with most budgets this summer
meeting in the middle.

Speaker 1 (02:44):
All right, appreciate time, Shane Retty. Here's the Health minister.
The details are the finer details of There's some very
good work done by Thomas Coglin in the Herald this
morning if you want to watch. But I mean some
of these numbers, I mean thirty billion one in thirty seven.
You know one point five percent of the entire population
eighty three thousand city. It's a city and a reasonable
sized city of people who work for health New Zealand

(03:06):
and still WI sit there going, oh, you can't get
access to a doctor. For more from the Mic Asking Breakfast,
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