DHBs on the backfoot

LETTER

Confession! Mine was that question at Wednesday’s candidate forum about our District Health Boards having to meet an 8 percent capital charge out of their budgets — on top of other interest expenses. The only one able to explain this Treasury imposition was Gareth Hughes, but he has surely been in Parliament long enough to challenge such a ridiculous expense.

No one seemed to understand that the problem is not underfunding for our DHBs but the fact they are continually drained of resources. Successive governments having adopted the belief that public funding must be borrowed from private (mostly off-shore) sources.

Recently I researched the figures for the Auckland DHB to include in an address I gave at a Grey Power forum. The ADHB’s 2015/16 annual report reveals total funding costs for that financial year totalled over $101m. The capital charge alone amounted to $40.3m. These may not seem huge figures as a percentage of that board’s $1.3 billion budget — but it doesn’t take much imagination to realise how such sums could have been spent on better wages, earlier treatments and poverty relief.

The Labour and Green parties want to eliminate poverty, yet continue to support a system which increases the very income gap they deplore by making the super- rich owners of public debt even richer.

So here’s another confession. A year ago I reminded a top government economist about the way our sovereign Reserve Bank credit-funded the big banks when they were in crisis. Yes, he knew the details and added more. “If the RBNZ can credit-fund overseas-owned banks,” I asked him, “surely it can credit-fund our own public sector.” His reply? “Why not!”

Heather Marion Smith

Confession! Mine was that question at Wednesday’s candidate forum about our District Health Boards having to meet an 8 percent capital charge out of their budgets — on top of other interest expenses. The only one able to explain this Treasury imposition was Gareth Hughes, but he has surely been in Parliament long enough to challenge such a ridiculous expense.

No one seemed to understand that the problem is not underfunding for our DHBs but the fact they are continually drained of resources. Successive governments having adopted the belief that public funding must be borrowed from private (mostly off-shore) sources.

Recently I researched the figures for the Auckland DHB to include in an address I gave at a Grey Power forum. The ADHB’s 2015/16 annual report reveals total funding costs for that financial year totalled over $101m. The capital charge alone amounted to $40.3m. These may not seem huge figures as a percentage of that board’s $1.3 billion budget — but it doesn’t take much imagination to realise how such sums could have been spent on better wages, earlier treatments and poverty relief.

The Labour and Green parties want to eliminate poverty, yet continue to support a system which increases the very income gap they deplore by making the super- rich owners of public debt even richer.

So here’s another confession. A year ago I reminded a top government economist about the way our sovereign Reserve Bank credit-funded the big banks when they were in crisis. Yes, he knew the details and added more. “If the RBNZ can credit-fund overseas-owned banks,” I asked him, “surely it can credit-fund our own public sector.” His reply? “Why not!”

Heather Marion Smith

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Julian Michael Tilley - 2 months ago
Hi Heather, my own confession is I did not know about the 8 percent capital charge - I'm picking it's a charge to the DHB for the use of the capital assets. That seems odd however as it's the taxpayer that has paid for them already.
It's a great question for the Rt. Hon Winston Peters next Tuesday. I hope you can make it at 12.30 - 12th Sept, at the Gisborne Cosmopolitan Club, and put that question to him. I will be very interested in the answer myself.
One thing I really am concerned about is the prospect that our regional airports could close or be run down. That would put lives at risk as our air ambulance service operates from the Gisborne Airport.
NZ First policy of using GST from tourism to maintain our regional airports is sensible. Another policy is to entrench in law a requirement for a five-yearly review of airport charges to airlines.
That would potentially make a difference to our inbound and outbound airfares and tourism opportunities. I understand that landing fees charged to airlines in Gisborne are higher than those charged to airlines landing in Napier.

Disclosure - NZ First Candidate - East Coast

Mary-Ann de Kort - 2 months ago
Thank you for explaining that Heather.
I have heard Minister Coleman asserting there is enough funding for health.
Maybe the gross figure is set correctly and might have been enough apart from the fact the 8 percent capital charge and repayment of the deficits the DHBs operate under suck up a large chunk of the budget.
These extra expenses then render the operating budget to be well and truly insufficient.
That is probably why eye injections have been classed as elective surgery even though that would be a bit of a stretch of anyone's imagination. It does hike up the figures though.
Wouldn't it be a great idea if there was no capital charge and debts and deficits were forgiven so the health budget could be spent on health instead of debt servicing.

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