The Vote Health package for Budget 2024 provides a significant investment to support New Zealanders to have timely access to quality health care. The package is focused on addressing increased costs faced by the health system, along with targeted new spending.
The Vote Health package provides $16.68 billion in new cost pressure funding over three Budgets to address cost pressures faced by Health New Zealand in delivering health services for New Zealanders. This includes a total of $5.720 billion in Budget 2024, and pre-commitments of $5.480 billion against each of Budgets 2025 and 2026. It also includes $312.2 million in operating funding for targeted new spending initiatives in Budget 2024 over the forecast period and $110 million in capital funding.
This is additional to a $1.774 billion increase for the Combined Pharmaceutical Budget over the forecast period. This investment, announced before the Budget, addresses previous time-limited funding and provides New Zealanders with the same level of ongoing access to medicines.
The package also includes savings, including targeted policy savings of $151.643 million over the forecast period. In addition:
- $50.400 million over the forecast period is being returned through a reduction in back-office functions at the Ministry of Health
- $339.476 million of operating contingency funding and $123.561 million of capital contingency funding is being returned for higher priorities. Funding that had been set aside for capital projects that has not been called upon is being returned, with future decisions on these projects being part of future budgets and business cases.
Cost pressure funding
Vote Health at Budget 2024 shifts to a multi-year funding approach for cost pressures.
Multi-year funding will allow Health New Zealand to know what amount of funding it has over three Budgets to better plan and deliver frontline health services including Emergency Departments (ED), primary care, aged care, public health services, and assist with the retention of the health workforce.
The package provides $16.68 billion over three Budgets to address cost pressures faced by Health New Zealand in delivering health services for New Zealanders.
As a result, funding for Health New Zealand will increase by $1.430 billion in 2024/25 ($5.720 billion across the Budget 2024 forecast period), with a further increase of $1.370 billion in 2025/26 (precommitment of $5.480 billion against the Budget 2025 forecast period) and another increase of $1.370 billion in 2026/27 (precommitment of $5.480 billion against the Budget 2026 forecast period).
The annual increase in funding from each Budget is carried forward into the baseline, meaning that the annual increases across the three Budgets are cumulative.
The funding includes cost pressure uplifts for Hospital and Specialist Services; Primary, Community, Population and Public Health Services; and hauora Māori services.
This cost pressure funding supports keeping pace with demographic changes (as our population increases and ages) and increasing costs (inflation).
The cost pressure funding arrangement across three budgets provides certainty of funding to the health system so work on improving our frontline services can continue.
Other initiatives
View the full Budget 2024 summary of initiatives for Vote Health.
In addition to cost pressure funding, the Budget 2024 Vote Health package includes new initiatives. These primarily comprise the Government’s commitments, including funding for increased emergency department security and extending the free breast screening programme. There is also support for training new doctors and critical capital projects. The package also addresses time-limited funding and progresses savings initiatives.
