Wellbeing Budget 2022

A Secure Future

Laying the foundations for a better future


We know from COVID-19 that a healthy population means a healthy economy. The pandemic has highlighted the need to reform New Zealand's health system and ensure we are delivering quality services in an equitable and sustainable way. In April 2021, the Government outlined our plan for a truly national health service. Based around two new lead entities, Health New Zealand and Te Mana Hauora Māori / the Māori Health Authority, this new system will replace the existing 20 district health boards (DHBs) and take on responsibility for running our hospitals and delivering healthcare services.

To set this system up for success, we also need to change the way we fund the health system. In recent years, funding has not kept pace with the increasing costs for District Health Boards, resulting in growing deficits. Relying on the annual Budget cycle for funding has also made it difficult to plan for future investments and meet long-term challenges in the health system.

To address these issues, we are introducing a new multi-year funding model for Health, beginning with a two-year package of investments through Budget 2022 and Budget 2023, before eventually moving towards a three-year funding cycle from Budget 2024 to support the first New Zealand Health Plan.

The two-year transitional package agreed through Budget 2022 includes $11.1 billion total operating and $1.3 billion capital to address historic and future funding pressures across the health system. Alongside sustainable funding to ensure the system delivers improved outcomes for all New Zealanders, we are addressing historic shortfalls by providing funding to remediate deficits incurred by DHBs (planned at $550 million in 2021/22). Unlike in previous Budgets where cost pressures for specific services have had to be traded off against each other, delayed or partly funded, this general uplift will allow Health New Zealand to take a centralised view and identify priorities for funding across the system.

We are also making significant investments in new initiatives to deliver on the health system reforms and Government priorities. These investments, spread across the Budget 2022 and 2023 operating allowances, include:

  • Investment in primary and community care ($488 million total operating). Our vision for the reformed health system includes refocusing and strengthening the role of primary and community care. Our initial steps toward that vision include rolling out local models of care that are tailored to the populations they serve, and securing and developing the capacity and capability of Māori and Pacific healthcare providers to deliver quality services to their communities.
  • Support for Māori health services ($299 million total operating). Budget 2022 includes a range of investments aimed at enhancing rangatiratanga for Māori in the health system, including funding to support Hauora Māori Commissioning, Iwi-Māori partnership boards, and Māori providers of primary and community care. These investments form part of a wider package of initiatives totalling $580 million across the Health, Social and Justice sectors which contribute to Māori health and wellbeing.
  • An increase in the PHARMAC Budget ($191 million total operating). We are committed to ensuring that New Zealanders continue to have access to the medicines they need, especially in a context of inflation and global pressures on supply chains. Budget 2022 provides funding to increase the Combined Pharmaceutical Budget, which is managed by PHARMAC and covers the purchase of medicines, vaccines, medical devices and other treatments.
  • Mental health and addiction services ($202 million total operating). We are investing $100 million total operating funding into strengthening our specialist mental health and addiction services in targeted areas across the country. We are also continuing to invest in two programmes that support young people with their mental health - Mana Ake, which provides mental wellbeing support for primary and intermediate school-aged students, and Piki, which provides integrated mental health and addiction support for young people in the Greater Wellington area.
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