Speech Notes for Budget lockup briefing on Health measures in Budget 2005

It is a pleasure to be with you this afternoon to give you details of the major changes for Health in the 2005 Budget. My Colleague the Hon Annette King regrets that she cannot be here today, as she is representing New Zealand at the World Health Organisation annual meeting in Geneva.

I will first cover the headline numbers then highlight particular areas of spending.

The Headline numbers
The government’s commitment to effective and responsive health services for all New Zealanders is reflected in new budget spending of $969.7 million in 2005/06 and $4.09 billion over the next four years.

Total Vote Health will reach an unprecedented $9.68 billion in 2005/06.

Primary Care
There are now 77 Primary Health Organisations (PHOs) serving 3.8 million New Zealanders. Funding for them over the next four years will be increased by $196.4 million.

Under 18s and over 65s in PHOs already qualify for lower cost primary health care visits and lower charges on most prescription items. From 1 July, $17.2 million of new money ($74.4 million over four years will allow some 330,000 18 to 24 year olds enrolled in PHOs to do like wise.

This will be extended to 45 to 64 year olds enrolled in PHOs, in July 2006 and all other New Zealanders in PHOs from July 2007.

Overall the government has now committed to spending $2.2 billion in new money over the seven years from 2002-03 to make primary health care more affordable and accessible, representing an unprecedented investment in sustainable funding.

Home based care services
Funding for home based support increases in 2005/06 by $18.7 million comprising $12.4 million for older New Zealanders and $6.2 million for younger people with disabilities. These services may also benefit from baseline increases to cover inflation and demographics being applied to disability support and aged care services.

The new money should help allow for improvements in quality and working conditions (including pay and training), and cover increases in the prices.

Disability support services
An additional $59 million is provided in 2005/06 for disability support services and the provision of assessments.

Of this $29.6 million will be added to baseline funding for disability support services to cover inflation and demand growth (both residential and home based); $14.4 million for Kimberley Centre residents, $8.4 million for younger people needing residential disability care, and $6.6 million to improve Needs Assessment and Service Co-ordination (NASC).

Aged care
The government recognises the pressures faced by workers, providers and DHBs in meeting expectations for high quality residential care services.

Additional baseline funding for care for older New Zealanders for 2005/06 is $71 million comprising $32.5 million to fully fund DHBs for residential aged care services and $38.4 million to cover inflation and demand growth, some of which may be applied to home based services in addition to the extra $12.4 million I mentioned earlier.

This is in addition to the $16 million baseline increase for aged residential care announced in December 2004.

Asset testing
We're keeping our promise to phase out asset testing for older New Zealanders needing residential care.

From 1 July 2005 single people and couples with both partners in care will be able to keep up to $150,000 in assets. Rates will also rise for couples where one partner is in care. Thresholds for all groups will increase by $10,000 per year from 1 July 2006.

New funding of $93 million in 2005/06 will exempt thousands more older New Zealanders from paying base fees.

Mental Health Blueprint
Mental Health spending has been a high priority for this government from the start. New funding of $22 million is being provided for implementing the Mental Health Blueprint, to improve services and support to those with significant mental health needs.

Meningococcal B Vacine
The provision of the Meningococcal B vaccine to all New Zealanders under the age of 20 is a priority. Total government funding for this is $178 million, with $31 million being provided in 2005/06. Rollout should be completed by the end of next year.

Hospital Rebuilding and Upgrading
New hospitals have already been opened in Auckland, West Auckland, Christchurch and Invercargill under the largest public hospital upgrade ever undertaken in New Zealand. Current projects benefiting from more than $500 million in government funding include: Waitemata, Counties Manukau, Wellington, Kenepuru, Wairarapa, Horowhenua, Dunstan, Waikato, Thames, Kaitaia and Tauranga.

Other initiatives
Cancer initiatives are to get $35.5 million in 2005/06 and $142 million over four years including more money for hospices and extending free breast screening to all women aged between 45 and 69. This new money is part of the implementation of government's Cancer Control Strategy.

Government has also recently announced $17.2 million over three years for up to 4000 extra cataract operations a year by 2008 and $73 million over four years, for a targeted doubling of orthopaedic major joint operations.

These initiatives and the unprecedented funding now going into the DHB sector together with the capital programme illustrate the government’s determination to provide first-class hospital and health facilities and services throughout New Zealand.