A crucial Budget for primary care: Cyclone recovery a priority but unlikely to be at health’s expense

I would eat my hat if there wasn’t a substantial decision made about primary healthcare funding

A public policy expert says she is looking to the Budget in May for major action on primary care funding.

“The current health reforms will not succeed without significant breakthroughs in how primary care is funded,” says Verna Smith, senior lecturer in public policy at Victoria University of Wellington.

“[The] social investment case is so outstandingly clear to me,” says Dr Smith, “that we need to invest now, to get ahead of all of the challenges of (a) the inequity of outcomes but (b) the ageing population and the burden of caring for that, not only in terms of health and wellbeing but just in terms of longevity.”

She adds: “I would eat my hat if there wasn’t a fairly substantial decision made about primary healthcare funding.”

Dr Smith says Labour has the opportunity to “really put a marker in the sand for what it is expecting from the reforms”.

Prime minister Chris Hipkins and finance minister Grant Robertson were forced to go back to the drawing board with their Budget plans in the wake of last month’s cyclone devastation, with big questions around what they will announce on 18 May in terms of recovery and how they will pay for it.

Infometrics principal economist Brad Olsen says the Government knows it needs to invest more in healthcare, with the COVID-19 pandemic putting the state of the sector at the forefront of voters’ minds.

"I can't see them touching the healthcare budget to try to fund the [cyclone] recovery,” Mr Olsen tells New Zealand Doctor Rata Aotearoa. “I definitely can’t see them cutting it, that would be bizarre at a time when cost pressures are as high as they are.

“I think there’s also a real need to maintain funding levels at the same level they are now in real terms, so accounting for that inflationary effect.”

The Government has “a lot of borrowing room”, if needed, to access more funding for the cyclone recovery, he says, and that’s the most likely route it will take.

However, larger projects are “probably off the table” this year.

Mr Olsen says: “There’s been a lot of conversations recently around GP funding and what happens on the primary [care] side of things, so that seems to be an area that could see greater investment.”

University of Otago health policy professor Robin Gauld says the Government will have to “dig deep” to fund the cyclone recovery and also meet its other obligations.

The $300 million immediate funding package announced on 20 February was non-earmarked expenditure, outside the Budget, Professor Gauld says.

He says more funding will likely be announced and the question is whether it will be taken from other areas and then reallocated to a new cyclone relief fund, “or whether they just add it in to the Budget”.

“But,” he continues, “if any money comes [out of] healthcare, I think it’s going to be a bad move.”

Professor Gauld adds: “We might actually see more money going into primary care, and into general practice and then we might see, alongside that, money going into the localities.”