Government knew of DHB blunder before Budget

Labour says Health minister Jonathan Coleman's "disinterest" is causing problems in the sector. Photo: Lynn Grieveson

The Government knew about a blunder that saw DHBs allocated incorrect funding the day before the Budget, but released statements boasting about the individual cash injections anyway.

On the day of this year’s Budget, 25 May, increased funding for cash-strapped DHBs was announced.

But the sheen was quickly taken off the news a few weeks later, when it was revealed the amounts allocated to each DHB were wrong.

Fairfax reported the blunder, which Health Minister Jonathan Coleman said he was furious about.

DHBs were altogether awarded a yearly figure of $439 million, which would not change, but $38m of that had been allocated incorrectly.

Of the 20 DHBs, 14 were awarded too much - meaning they would have to survive with less so the balance could be returned to the six DHBs who did not receive enough.

DHB funding is calculated with a complex formula, but has been done so for years without a problem.

The Labour Party has now learned Coleman’s office was told about the error the evening before the Budget.

Despite this, individual press releases were pushed out to media on 26 May – the day after the Budget – specifically mentioning the amounts each DHB would receive.

David Clark, Labour’s health spokesperson, said it appeared there had been an attempt to hide the matter.

“It’s both outrageous and embarrassing at the same time, the cover-up is worse than the cock-up.

“People in New Zealand are pretty fair-minded, occasionally mistakes are made and people forgive them, but the intentional misleading and the attempt to cover up this mistake really cuts to the core of our values.”

The episode pointed to a wider malaise in the health sector, with a history of financial mismanagement putting a strain on the relationship between DHBs and the Ministry of Health.

A draft performance review report from Paula Rebstock on the Ministry was sitting with Coleman, and Clark said he had been told it was damning.

Morale was poor at the Ministry and Coleman, who Clark described as “disinterested”, needed to take responsibility, he said.

“It’s not a healthy culture and it’s dishonest, these are parliamentary appropriations and this is about honesty and integrity.”

Following the funding blunder director general of health Chai Chuah made a grovelling apology to both Coleman and DHBs.

But this wasn’t enough for some DHBs, who continued to criticise the Ministry.

In a short, written statement, Coleman told Newsroom the figures used in the press releases used a combination of the DHB allocation as well as the top up DHBs receive from the Ministry.

“Only over subsequent days did the full extent of the Ministry’s error emerge.”