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Health boards deficits forecast to hit $508m

Aug 03, 2019

District health board deficits are set to balloon to more than half a billion dollars for the year - nearly double last year's total.

However, the Ministry warns the final tally is likely to be even higher.

Ministry of Health figures released Friday show DHBs were $423 million in the red at the end of May - an increase of 36 percent in a single month, and more than double the total at the same time last year.

At that point, DHBs were forecasting a $508m deficit for the year to the end of June.

However, officials warned the forecast was "conservative" as some boards had not included the years of backpay owed workers because of underpayments under the Holidays Act, nor the expected cost of fixing or replacing a $90m IT system that had failed to deliver.

Canterbury and Waitematā had the biggest blow-outs for personnel costs, due to the mosque terror attacks, an outpatient building flood and heavy flu season in Christchurch, and higher nursing costs, collective contract settlements and building costs in Waitematā.

Despite that, Waitematā DHB's deficit was relatively small, at $7m as planned.

National's health spokesperson Michael Woodhouse, who earlier accused the Minister David Clark of refusing to release the information, said deficits were "out of control".

"Instead of dumping bad news late on a Friday afternoon, Dr Clark should be explaining why he's failed to bring deficits under control.

"The figures are not a surprise. The government has neither provided the funding they claimed they would give DHBs, nor set expectations for continued fiscal discipline."

In a statement, Dr Clark said he did not accept that deficits were inevitable - nor would the Government let DHBs cut services to manage their budgets.

"The deficits are a result of underfunding over the nine years of the National government."

The fact that some DHBs had managed to post small surpluses, break even or only post small deficits while maintaining services showed it could be done, he said.

The Budget included an extra $2.8 billion for DHBs over the next four years, which was "a record" $695m increase in funding for DHBs this year.

"But I do want to acknowledge, once again, that after years of underfunding, it will take time to get them all back on the path to sustainability."

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