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NZ Budget Preview: New Health Agency to Become Biggest Employer

by Cameron Sinclair •
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New Zealand’s 2022-23 Wellbeing Budget is scheduled to be delivered on Thursday 19 May. There were some spending clues contained in the December Half Year Update, which outlines a pressing need to overhaul ageing ICT assets, particularly in the health and education sectors, and reminded agencies of the obligation to comply with existing ‘cloud-first’ policies.

The other matter of note is the release of NZ infrastructure strategy (2022-52) in early May, with specific acknowledgment from the government that more investment is needed to replace aging water, electricity, and transport networks. 

The 19 May Budget will be the NZ Labour Party’s fifth and falls at the mid-election cycle point of the government’s second term.  

Intermedium research has found that the mid-election cycle budget of any jurisdiction often constitutes a peak in ICT funding, when larger multi-year programs are given the green light 

Intermedium expects to see fresh funding for the new centralised health system, announced in April last year. Finance Minister Grant Robertson has confirmed that the new system will receive an initial two-year funding injection, before moving to a regular three-year budget cycle. 

In its  review of New Zealand’s 2021-22 Budget, Intermedium described the decision as “the end of a generational experiment with a patchwork of 20 decentralised District Health Boards (DHBs)”. 

The new mega-agency will be called Health New Zealand and will become the country’s largest employer once it is up and running in July, with a workforce of 80,000. 

Its interim Chief Executive, Margie Apa, previously ran the Counties Manukau DHB, chairs the National DHB Chief Executives Forum, and has previous leadership experience at Deputy Director-General level in the Ministry of Health. 

Robertson's pre-budget speeches also hint at more funding for the justice system, “so they can plan ahead: lock in longer-term contracts to have greater certainty on costs; hire the experts they need, and put in place plans to be able to manage cost fluctuations.” 

With unemployment at a record low of 3.2%, New Zealand’s labour market remains “exceptionally tight”, with digital and tech skills continuing to be in short supply. 

ADDITIONAL BACKGROUND 

New Zealand’s formal Budget process begins five months out, in mid-December, with a Budget Policy Statement for 2022-23, outlining the ‘challenges to address.’ 

In addition to managing the post-COVID recovery, these are addressing “climate change response, housing affordability and child poverty.”  

This document also notes that remote working and “better digital connectivity” will support efforts to reduce emissions from air and road travel. 

The finance minister traditionally delivers a series of pre-Budget speeches. 

He delivered the first to the Auckland Business Chamber on 23 March, warning of rising inflation and looming challenges. 

He presented another at an event hosted by Rabobank on 3 May, outlining an intention to change accounting practices to allow capital costs to be spread over rolling four-year periods, instead of in a specific financial year (public accounting rules ordinarily require the full cost to be booked when a decision is made, rather than when the expenditure actually occurs). This will allow for more reliable funding for complex, long term reforms. 

The Wellington Chamber of Commerce will host a pre-Budget Breakfast on Thursday 12 May. 

Prime Minister Jacinda Ardern must go to the polls by January 2024. 

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Jurisdiction
  • NZ
Category
  • IT Services
  • Labour Hire
Sector
  • Health
  • Industry & Investment