Sharp cut to annual increase in health spending

The annual increase in health spending - about 8% for most of the past decade - will fall in the future to about 5%.

That was stated on Monday by Health Minister Tony Ryall in a speech to an Orthopaedic Association meeting in Wellington. He said that the health sector had received sizeable funding increases but that these would now drop.

Mr Ryall also told the meeting that as part of its plan to cap public-service numbers the Government had scrapped 200 unfilled positions at the Ministry of Health in order to free up nearly $20 million for "frontline services".

He said that the Government needed doctors' help to get better value for its spending, and that improving the buying of medical devices across all district health boards was one real opportunity to do that.

Healthcare still a high priority - minister

Mr Ryall says the Government is seeking to improve the healthcare of New Zealanders in the context of the worst global economic crisis since the 1930s.

In such a situation, he says, it's more important than ever that the country live within its means while trying to protect and improve the public health service - something on which the Government places high priority.

For that reason, Mr Ryall says, the health sector still got half of all new spending in the last Budget: $750 million, while 30 or so other ministries and departments shared the remaining $750 million.

Mr Ryall told the Orthopaedic Association meeting that next year the new spending allocation for the entire government could be even less - perhaps about $1.1 billion rather than $1.5 billion.