Population pressures at fore in Budget health, education spending

The day after a protest outside Parliament about health worker shortages, the Government has sought to ease pressures on the health system through its Budget. Photo: Lynn Grieveson.

With a rising population comes rising demand on public services – and as the Government knows, a rising bill.

The strains caused by record migration were one of the themes in the Budget, particularly in spending for the core areas of health and education.

In his Budget speech, Finance Minister Steven Joyce described investment in public services for a growing country as “the Government’s biggest single fiscal priority”.

Joyce boasted of record levels of investment in health, with an extra $3.9 billion in funding spread over four years.

However, that headline figure is somewhat inflated, given the inclusion of $1.54b to increase the wages of care and disability support workers,
following a landmark pay equity settlement which the Government initially fought but has now embraced.

District health boards will receive an extra $1.76b to help them cover pressures from inflation, wages and a rapidly growing population. The funding boost comes as DHBs have been fighting to save more than $200m in required “efficiencies”.

Mental health fund

Mental health services are also given particular attention – unsurprisingly, given reports of increasing demand that is putting strain on the system and leading to long wait times for those in need.

A $100m contingency fund has been set up for mental health as part of the social investment programme, with the Government saying it will “target innovative new proposals to tackle mental health issues” – exactly what those may be is unclear.

There’s also $4.1m for the Ministry of Social Development to trial integrated employment and mental health services, $11.6m for the Department of Corrections to improve its management of prisoners at risk of self-harm, and $8m for a fund to reduce suicide and self-harm among young Maori.

Health Minister Jonathan Coleman has also touted an extra $100m for DHBs to support local mental health services, although that figure is included within their overall budget increase rather than ring-fenced off.

At a time when mental health issues are increasingly making their way into mainstream conversation, the Government is clearly hoping it can inoculate the issue before it negatively sways voters’ opinions during the election campaign.

Health isn’t the only area of high public interest to be targeted by the Government.

Relief for rising rolls

The education system has received a $1.5b boost, including $1.1b of new operating funding and $392.4m of capital funding.

Schools’ operational grant funding has been increased by $60.5m, or 1.3 per cent, after what some criticised as a freeze in last year’s Budget.

Primary and secondary schools, along with early childhood education centres, are getting an extra $767m of operational funding to deal with increasing student numbers, in a week where a Ministry of Education report revealed concerns about the growing number of schools nearing full capacity in Auckland and elsewhere.

That also explains the extra $456.5m investment in school properties ($392.4m in capital and $64.1m in operating funding) to build six new schools, expand two others, and build a number of special units and new classrooms.

The bulk of that money, $277.6m, is going into Auckland, with Education Minister Nikki Kaye saying the extra funding will increase the total number of new student places in the city to more than 21,000 by 2021.

Separately, $31.9m has been set aside to buy land for new schools as demand grows - along with New Zealand’s population.