The National-led government’s 2025 Budget has been underwhelming to say the least. But it’s an especially grim read for anyone who values a functioning public health system. Despite the glossy spin from Health Minister Simeon Brown, the numbers don’t lie: New Zealand’s health sector is being short-changed. The much-touted $1.783 billion in new health spending sounds impressive until you scratch the surface and realise it’s barely enough to keep the lights on, let alone deliver the world-class care New Zealanders deserve. Once again, National’s obsession with fiscal restraint is strangling our hospitals, General Practitioners, and other frontline health workers.Last week, the NZCTU reported:
Billions missing from health budget
“We have examined the spending decisions and announcements of the Minister of Health over the past few months. These demonstrate a pattern of making a new service promise but not providing any new funding for that new service,” said NZCTU Economist Craig Renney.
“That means the commitments have to be paid out of the existing budget, which is already under huge pressure. These sneaky cuts add up to $1.2bn across 4 years.
“At Budget 2024 the government provided $1.370bn for cost pressures. This has been calculated by the Treasury as simply covering the cost of existing services. The $1.2bn of new spending are all new services on top. If they come from the ‘cost pressure’ payment above, that acts as a direct cut to existing health services.
“Assuming the Treasury cost pressure costs are right, health needs $1.713bn just to stand still at Budget 2025 in direct new funding – and likely a figure closer to $2bn once the unknown costs are added.
“We have examined the spending decisions and announcements of the Minister of Health over the past few months. These demonstrate a pattern of making a new service promise but not providing any new funding for that new service,” said NZCTU Economist Craig Renney.
“That means the commitments have to be paid out of the existing budget, which is already under huge pressure. These sneaky cuts add up to $1.2bn across 4 years.
“At Budget 2024 the government provided $1.370bn for cost pressures. This has been calculated by the Treasury as simply covering the cost of existing services. The $1.2bn of new spending are all new services on top. If they come from the ‘cost pressure’ payment above, that acts as a direct cut to existing health services.
“Assuming the Treasury cost pressure costs are right, health needs $1.713bn just to stand still at Budget 2025 in direct new funding – and likely a figure closer to $2bn once the unknown costs are added.
Let’s break down the funding shortfalls even further. Budget 2025 boasts a 4.8% increase in Vote Health, bringing the total to $31.052 billion. Sounds decent, right? Wrong! When you factor in inflation and population growth (driven by immigration and an ageing demographic), the real per capita health funding is declining by around 1% each year over the forecast period.
Health NZ’s cost pressure uplift of 6.2% might outpace CPI inflation, but it’s nowhere near enough to cover the actual costs of delivering services in a country where demand is skyrocketing. The NZCTU estimates a shortfall of $1.2 to $2 billion just to maintain existing services, let alone address the backlog from COVID-19 or workforce shortages.
Despite these obvious funding shortfalls, Simeon Brown has gone on the attack:
Despite these obvious funding shortfalls, Simeon Brown has gone on the attack:
Ginny Andersen tried rewriting history on ZB this morning, claiming there was no new health funding in the Budget. We already know Labour is economically illiterate, but for Ginny to think Kiwis are too is an insult. 🧵
— Simeon Brown (@SimeonBrownMP) May 27, 2025
National’s track record on health funding is a masterclass in deceptive cost-cutting. During their 2008–2017 tenure, per capita health funding eroded as they consistently failed to match inflation and immigration-driven demand, resulting in a real per capita spending drop of around 3%. The fallout was brutal: overworked nurses, understaffed hospitals, and patients languishing on wait lists for months. Fast forward to 2025, and National’s back at it, dressing up a bare-bones budget as “record investment” while frontline services buckle under the pressure.
The kicker? National’s priorities are wildly out of touch. While they’ve funnelled $164 million into after-hours care, a move Labour’s Ayesha Verrall rightly calls a drop in the bucket, they’ve slashed $381 million from digital health infrastructure and $35 million from Primary Care teams. Along with the Te Aka Whai Ora (Māori Health Authority) cuts in Budget 2024 of over NZ$100 million, these represent significant cuts to frontline services that are not being replaced. Instead of investing in training doctors and Nurses or modernising systems, they’re pouring billions into tax cuts for the wealthy and subsidies for tech giants and landlords. It’s a slap in the face to health workers and patients alike.
National’s failure to invest in the sevices that are required while claiming there's “no lolly scramble” in Budget 2025 is laughable when you see where the money’s actually going. Health NZ is still $1.1 billion in the red, and this budget does nothing to plug that gap.
Today, RNZ reported:
Government's health boost less than claimed, expert says
However, Auckland University health policy Professor Tim Tenbensel said, according to his calculations, the $31 billion allocated for health in the Budget was only 3.6 percent more than what was actually spent last year.
"So, we're pretty much treading water at best, or rather sinking a little, in this budget," Prof Tenbensel said.
Furthermore, operational funding last year only increased about 1.2 percent in real terms.
…
The trick was to keep adding on the previous year's increase as "new money", ignoring the fact that it would have been eaten up by inflation.
"It's a very creative ploy that one, so I think we need to see it for what it is," he said.
"All governments do this sort of thing, but in the scheme of things, this one is pretty brazen."
However, Auckland University health policy Professor Tim Tenbensel said, according to his calculations, the $31 billion allocated for health in the Budget was only 3.6 percent more than what was actually spent last year.
"So, we're pretty much treading water at best, or rather sinking a little, in this budget," Prof Tenbensel said.
Furthermore, operational funding last year only increased about 1.2 percent in real terms.
…
The trick was to keep adding on the previous year's increase as "new money", ignoring the fact that it would have been eaten up by inflation.
"It's a very creative ploy that one, so I think we need to see it for what it is," he said.
"All governments do this sort of thing, but in the scheme of things, this one is pretty brazen."
Kiwis deserve better than this neoliberal penny-pinching. National’s refusal to properly fund health isn’t just a budget failure...it’s a betrayal of every New Zealander waiting for a hospital bed or a specialist appointment. If they keep robbing Peter to pay Paul, our health system won’t just stagnate; it’ll collapse. Time to call it what it is: a deliberate choice to prioritise profits over people.
