24 May 2012

Biggest boost for health sector

10:45 pm on 24 May 2012

The health sector will receive the largest increase in Government spending in the 2012 Budget, with an extra $1.5 billion over the next four years.

The Government says health again receives the biggest increase in spending with $435 million available to meet cost pressures and new initiatives.

It says it will take total health spending to $14.12 billion in the next financial year. This represents an overall rise in expected spending on health of about 4%.

Spending on new initiatives and costs comes from $358 million in new money for health, combined with $47 million worth of savings and reprioritisation in heath, and $30 million in savings from drugs coming off patent.

District Health Boards will have about $350 million this year, as well as extra funding from the Ministry of Health for service contracts.

Much of the extra funding over the next four years has already been announced, including $133 million for improved disability services; $33 million for improved cancer treatment; $16 million for faster diagnostic tests; and $48 million for more elective, or non-urgent, operations.

As well, $28 million is allocated over four years to provide free after-hours doctors' visits for under sixes; $12 million for more support services for older people; and $40 million for more dementia services.

Some $60 million is earmarked for capital for new buildings and hospitals over the next four years.

The health sector is to receive a total of $88.1 million - most of it for hospital redevelopments - from the proceeds of partial asset sales. Some $28 million of this is to refinance the debt of the Capital and Coast District Health Board in Wellington.

The Budget also makes changes to enable the threshold for the residential care adjustment to change in future in line with the Consumer Price Index, rather than rising at a flat $10,000 a year. The threshold this year is $210,000.

The Government is also continuing to increase the tax on tobacco, which will rise by 10% over and above inflation each year from January 2013 for the next four years.

In measures announced before the Budget, prescription charges will increase from $3 to $5, up to a maximum of 20 items per year from 1 January 2013.

There will be $101 million in extra funding over the next four years for more non-urgent operations, improved cancer services and faster diagnostic tests.