The deadlock over pay between nurses and their employers is unlikely to be broken unless more funding comes from the government, say the nurses' union.
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About 27,000 public sector nurses and midwives have rejected a pay deal proposed by the district health boards.
The Nurses Organisation said members would prefer to settle than to strike and the union won't decide whether to hold a strike ballot until mid April.
The union and the country's DHBs will meet today in a new bid to resolve the dispute and explore whether to set up the independent panel suggested by Prime Minister Jacinda Ardern.
Nurse's Organisation spokesperson Cee Payne told Morning Report today that employers have said they just did not have the money to pay what had been tabled at a claim and were waiting for the government to sort out funding.
"DHBs have always said to us that they just can't afford to pay."
Ms Payne said the new government had signalled it was going to invest in health funding and the union believed it had a strong case for nurses to be paid more to increase the workforce.
Ms Ardern told Morning Report the government was aware that the issue was that DHBs were in deficit, and it was currently working hard on a plan to fund and reinvest in the health sector again.
"We've committed to reinvest in health services. I didn't realise how bad the situation was - particularly on the capital side of the ledger - but equally, just in terms of what how DHBs are operating on, we're trying to resolve that."
Independent panel plan
Ms Ardern yesterday proposed an independent panel be set up to break the impasse.
She said today she was staying out of the negotiations and nurses could choose for themselves whether a panel was needed, but she could make the suggestion.
"It's not for me to now enter that negotiation."
Ms Payne said the first the union knew of the panel was yesterday afternoon, but it would be interested to explore what the panel looked like and how it would sit within the bargaining framework.
She said it could it make a difference and the union had used a similar framework in the past.
The district health boards said an independent panel would need to act promptly to avert a national nurses' strike.
District health boards spokesperson Ashley Bloomfield said an independent panel would need to come up with recommendations urgently.
"Over a period of weeks, rather than months. And obviously we're very keen to progress that suggestion for an independent panel and help find a solution and prevent disruption to health services. I think a strike would be a last resort."
