Joyce may have been right about the Fiscal hole

Written By: - Date published: 8:30 am, March 28th, 2018 - 100 comments
Categories: health, labour, national, same old national, spin, Steven Joyce, the praiseworthy and the pitiful, you couldn't make this shit up - Tags:

Recent news about the Health Ministry funding crisis suggests that Steven Joyce many not have been wrong about his claim that there was a $11.7 billion hole in Labour’s fiscal plan.  But the problem for National is that it looks like it has hidden a number of potential crises and news about them is only now starting to emerge.

My quickly compiled list for Health only issues that have recently arisen include the following:

  • $1.6 billion to remediate problems in Counties Manukau DHB buildings and a further $1.6 billion to build a new acute hospital and facilities.  Counties Manukau DHB think they need both.
  • $117 million being the deficit for health boards in the 2017 financial year.
  • $160 million being the estimated deficit for health boards in the 2018 financial year.
  • $81 million which is is the cost of  a 1% increase for nurses pay in year 1 over 5 years.

As well as this there is an estimated $2.3 billion deficit in overall health spending in 2017 alone.  Extrapolate that over 5 years and Joyce’s prediction looks quite possible.

Of course it is not evidence of Labour ineptitude and National fiscal skill.  Rather it is a sign of National’s failure to properly fund health and Labour’s obligation to fix up the mess.

Some things never change.

100 comments on “Joyce may have been right about the Fiscal hole”

  1. Tuppence Shrewsbury 1

    When the spinning and back tracking starts once you’ve left parliament, you can pat yourself on the back for being right.

    This isn’t of Joyce’s making, this is labour realising the full cost of there election commitments

    • One Anonymous Bloke 1.1

      They committed to fixing black mould in hospitals? Where? Put up or shut up.

      • Tuppence Shrewsbury 1.1.1

        Maybe? Maybe the minister for health has had informal meetings with Ajax area sales managers? Who would know.

        Plenty of the balance is a result of Labour’s election commitments, and ideological commitments,. Which is fine, but not Joyce’s fault

        • Tracey 1.1.1.1

          Can you show where Joyce as Finance Minister allocated the $110 minimum required to fix Middlemore’s facility problems?

          • Tuppence Shrewsbury 1.1.1.1.1

            So <1% off the hole can be attributed to new spending. 99+ to go

            • tracey 1.1.1.1.1.1

              So he didnt?
              1.6b is over 10% of 11bn so even if you are right, and you are not, it is 9 to go not 99.

              • Tuppence Shrewsbury

                You are right that 1.6bn is over 10% of 11bn. I was commenting on your $110, and i generously assumed you mean millions.

                $1.6 billion of remedial work? seems awfully high. seems like someone has extrapolated figures based off testing. that would also mean $180 million of remedial work for each year the last government was in charge. which seems a yuuuugggeee stretch of the imagination. it’s probably been going on since the government before that. more likely middlemore is poorly managed.

                Still, laying middlemores inability to stay current entirely at joyces feet, there is still exactly the same amount that has come about as a result of labours electoral spending promises. that will need to be funded for ongoing maintenance and operation too. so likely double or triple what labour have claimed it will cost to build over it’s life time

                • tracey

                  And Dunedin. Poorly managed too?

                  That sheets back to the Health Minister.

                  I hope you have good balance dancing on that pin head

                • Foreign waka

                  The question than still remains: Would that mean that the Treasury numbers were wrong? And if so, on what were these based on? Was it not the National Government priding themselves about the “open the books” numbers?
                  If Mr Joyce knew something nobody else did, why did he not disclose this to the Treasury and therefore ask for a revision of the balance sheet before it was finalized and made public?

                  One thing is becoming painfully clear, a lot of neglect has been going on by reducing the tax take at the expense of the ordinary kiwi. Now they have to pay for that many times over.

                • Venezia

                  The DHB spokesperson interviewed by Campbell on Checkpoint clearly said the problems with these buildings include toxic mould, seismic issues and asbestos, and that since the 2013 report, it was all well known in Wellington. In addition to the mess of the existing four buildings there is a need for another new building simply to keep up with population growth in their catchment. It is very difficult to believe that Jonathon Coleman had no knowledge of all this. More likely he was so focussed on his model of DHBs staying in “surplus” ( rock star economy) he ignored the inconvenient facts.

    • tc 1.2

      yes dear, numbers not a strong suit dear, never mind it’s not for everybody dear.

      Enjoying your cycleway dear ?

    • You_Fool 1.3

      Joyce doesn’t put aside adequate funding for health, Education, Policy pay, military upgrades (as signed up for by NAct) so these things are not in the Prefu, so Labour can’t account for them in their pre-election costings, but somehow it is Labour’s fault…. actually, you know, you are right, it is Labour’s fault, they should have assumed that National and Joyce were incompetent and couldn’t actually run a household budget, let alone our nation’s finances, and they should have assumed that National were out in their figures by about $25 billion or so…

    • Draco T Bastard 1.4

      No, this is National’s damages to the economy being found out.

    • SpaceMonkey 1.5

      This is a consequence of straight out underfunding of critical social services, by National over 9 years, in order claim budget surpluses.

      It’s neglect to an order of magnitude bordering on criminal.

      • Michelle 1.5.1

        Underfunding, selling assets, bringing in cheap labour and cheap education, dumbing down services its all slowly coming out despite our media lackies using distractions and playing there part.

  2. dukeofurl 2

    Isnt there something like $200 mill for the dairying Mycoplasma bovis outbreak. All the infected cows need to culled and the farmers re-compensated.
    And this from an industry where Fonterra pays no tax but gets a refund ( yes its a coop so the members get mostly paid for the milk on generous terms as a share of the revenue rather than as a run of the mill supplier).
    There should be an industry wide levy per cow to cover the costs to the taxpayer

    • Stunned Mullet 2.1

      This is just bollocks, Fonterra and farmers are subject to exactly the same tax regime as all other businesses and individuals in NZ.

      • Draco T Bastard 2.1.1

        Kinda.

        The tax system has been rigged over centuries to ensure that rich people don’t actually pay tax.

      • dukeofurl 2.1.2

        I didnt say they got a special deal.
        I said that Fonterra doesnt pay any tax and indeed gets a refund. Which is what they say in their annual accounts.
        As for the tax paid by dairy farmers each year, well its well known that they farm for capital gain and arrange their affairs so that very little tax is paid.

        • Chris T 2.1.2.1

          I think you need to look up the word co-operative

          It’s the reason they don’t pay tax

          They give their profits to the farmers and the farmers pay the tax

          • dukeofurl 2.1.2.1.1

            Its a two headed beast, part is a coop ( which I mentioned earlier distributes its income, but this woman farmer -Lyn Webster who writes a column- doesnt seem to realise it , and wonders why she isnt treated as ‘normal supplier’ https://www.stuff.co.nz/business/farming/101315168/perception-of-dairy-farming-a-long-way-from-reality).
            The other other part of Fonterra is a public company with shareholders ( farmers again) and produces a profit, but I think this is only there so it can get the $200 mill tax refund)

            • dukeofurl 2.1.2.1.1.1

              It would be interesting to look at the whole dairying sector- its something in the region of a $12 Bill of revenue, $10 bill from Fonterra
              Its supposed to be ‘business’ but I would seriously doubt that even 5% of revenue is paid as tax over the peaks and troughs.
              ( yes I know revenue isnt profit but we can scale from other business for a good idea)

          • Draco T Bastard 2.1.2.1.2

            You’re right that focussing upon Fonterra is wrong but, as the accountants in my family keep telling me, farmers don’t pay tax.

            This needs to be fixed. In fact, we need to put everyone upon PAYE ASAP. Self-employed? Right, here’s your business’s IRD number, here’s yours. Your business now hires you and pays your PAYE. Remember that the business needs to pay you at least the minimum wage and that it has to accurately report the hours that you work.

            I wonder how many of the small businesses out there would survive the change once they won’t be able to rip off everybody else.

            • dukeofurl 2.1.2.1.2.1

              With 6.5 Mill diary cows, how much is that per cow to pay for a bovine mycoplasm cost of $200 mill. Thats nearly $31 per cow, say spread it over 4 years we can get around $7.70 per head per year.
              Theres no reason for the taxpayer to pay as the disease affects production and isnt a danger for public.

      • KJT 2.1.3

        Average tax paid by a farm owner, annually. $1745. Source IRD. Don’t pay taxes then have their hands out. Almost was bad as below living wage employers who expect tax payers to subsidise the business costs of employing people with family support.

    • greg 2.2

      also an industry that has trashed our rivers

  3. patricia bremner 3

    The Government is finding out the depth of duplicity actively practised by the Natz on every level.

    Also DP has begun in earnest since Bridges got the Leadership. He was well trained by Key and English.

    So we have fiscal lies, nasty lies, and constant efforts to belittle causing death by a thousand cuts, aided by mistakes magnified by the press.

    Given how serious this cattle disease could be, a “state of emergency” may have
    allowed the Government the ability to move swiftly in some areas of deficit.

    Sadly there are signs of brakes being applied to a brilliant mind, and this will be self defeating. Parker and Peters are tempering the reforming group of ministers I feel.

    The “Old guard” is being cautious and not entirely supportive, hence Helen Clarke’s comment, that they are ” letting Jacinda down”.

  4. Sanctuary 4

    A clever finance minister would use these hidden costs to break the debt reduction and no tax rises promises and lay the blame squarely at the feet of the previous national government, using the power of government to show the public the extent of underfunding.

    Unfortunately, Labour has Grant Robertson.

    • Draco T Bastard 4.1

      +111

    • Nic the NZer 4.2

      A cleaver finance minister would never have signed up his party to a fiscal strategy which fulfills no economically beneficial objectives, is frequently irresponsible policy and often out of its hands (such as promising to run a surplus).

      Unfortunately, Labour has Grant Robertson.

    • John L 4.3

      ++++++++

      It’s all so familiar….National f**ks the books and the country, then Labour gets in and is left with the mess – is berated for trying to clean it up by the MSM, screaming heads and the Nats, gets most of the way towards getting back to square one, then the Nats are voted back in on a wave of false promises and the reduction cycle starts all over again……rinse and repeat…country steadily slides down the gurgler…..

      • AB 4.3.1

        Oh yeah. The arsonists abusing the firefighters. If you didn’t expect this from National you don’t fully appreciate their depravity

  5. adam 5

    1% for the nurses has to be *&^%%$^ joke.

    1% when most rent costs in auckland are growing at 6-8%

    1% when inflation measurements are a joke

    1% is a big &&^^%$ you to nurses.

    [It was a figure that I plucked out of the air. Currently the health boards have indicated they can afford a 2% increase. The 1% on top was where it might end up. Of course if it was 2% (on top of the current 2%) the amount would double – MS]

    • Siobhan 5.1

      yeah, this…I actually had to double check this figure it seemed such a joke. I would have thought you’d need that pay increase as a very minimum even if Nurses pay had been keeping pace over the last decade.

      If this is what Labour is ‘having’ to offer because of National mismanagement I hate to think what would be on the table if Labour were free to follow their own agenda.

    • One Anonymous Bloke 5.2

      Until the budget (and assuming it allocates more money for them), DHBs are hamstrung.

      • Siobhan 5.2.1

        “But the public also has an expectation based on the priorities outlined and the promises made that there will be more services delivered.”

        “So the money that we pledged to put into healthcare won’t all go into salary raises,” said Clark. “Not everyone’s expectations will be met. I think that is the reality and I think we need to be upfront about that. But a Labour Government recognises the need to have a sustainably funded workforce and the need to make sure we have safe staffing and healthy workplaces.”

        “Not everyone’s expectations will be met”…That doesn’t sound promising tbh..’lets do this’ definitely had a better ring to it!

        http://nursingreview.co.nz/ministers-aware-of-high-expectations-for-dhb-nurses-pay/

    • tracey 5.3

      It is the Brighter Future the Nats promised

      • adam 5.3.1

        Future’s so bright I have to wear shades.

        Or is that becasue the sun is actually coming though the holes in the walls of the hospital.

    • adam 5.4

      Thanks for the note for clarity MS.

  6. patricia bremner 6

    Because the previous government separated DHB’s they then can offer what they like to nurses, regardless of their funding increases from central government.

    Coleman always saw himself going to the private health sector, so he underfunded his future competition while in office. He should have a “stand down period”.

    The situation is dire, and “The sound economy” is as false as the “Rock star economy”
    People are fed up with waiting, impatient for change, and sadly Robertson is too slow

    Power wanes when it is not used, it wanes even more divided. MSM and Opposition Know this. Not coming down hard on cheats and liars is undermining trust.

    • SpaceMonkey 6.1

      And that stand down period should be equivalent the period of time he was Minister or Health. As it stands now, for him to go straight from overseeing the dismantling of our public health system to CEO of a private health organisation is wrong… wrong… wrong. It’s an outright conflict of interest and the media silence surrounding this is defeaning.

      It’s as though NZ has forgotten what values and ethics are.

      • tracey 6.1.1

        Especially when his new job includes 3 private hospitals which can tender to take overflow from public?

    • Tamati Tautuhi 6.2

      Bit like Roger Douglas and “the pain b4 the gain” ? = Neoliberalism ?

  7. Paul Campbell 7

    Does anyone think that Counties Manakau DHB is the only one – the Otago/Southland DHB is replacing all the hospital facilities in Dunedin (not just a 2 story building, everything, including the high rise block) because of a combination of asbestos and poor 70s building practices – one too many rain storms in an operating theatre. This one is largely already budgeted for, even the Nats couldn’t handle the previous scandal, but I’m sure every DHB has been putting big stuff off

    • tracey 7.1

      Am surprised Collins allowed this, representing some of Counties Manukau as she does…

      Dunedin and Counties Manukau… how many electorate Nat MPs ?

  8. cleangreen 9

    “Joyce may have been right about the Fiscal hole”

    Because he made it happen without telling us he was carrying out Austerity then secretly, so he was deceiving us all so we are the fools for letting him do this to us all.

  9. CHCOff 10

    If National can cook the books for nine years of rampant looting, then why not Labour for social investment? (because that wouldn’t be cricket?)

    • tracey 10.1

      And cos the media will drum up outrage

      Incredibly the Herald didnt run a single Minister must resign headline for 9 years

      • CHCOff 10.1.1

        I accept those things and do not see a problem to their structural impulses.

        Lobbying has it’s place, is natural, AND can be useful; i see it as being mis-applied in relation to a better functioning demand & supply market system though, and the way it is, having monolithic characteristics which i have a natural aversion to.

  10. Baba Yaga 11

    Here’s some news for you Mickey. From 2008.

    “A 40 per cent blow out in District Health Board deficits to over $150 million have been revealed by Health Minister Tony Ryall.”

    “Worse, around $250 million of capital requests from DHBs cannot be funded this year and there is another $400 million requested next year. Only a small percentage of this has been provided for by the previous government.”

    https://www.beehive.govt.nz/release/dhb-deficit-blowouts-greet-new-health-minister

    So the 2017 deficit was substantially less than under Labour in 2008.

    And there was $650m worth of capital requests Labour hadn’t funded.

    Joyce’s fiscal hole will eventually be proven to be conservative, not because if any invented crisis, but because Labour’s rhetoric has written cheques their economic management can’t cash.

    • tracey 11.1

      So the Brighter Future could have happened if only for “labour did it too”? So once Nats saw the shortfall why did they keep promising a Brighter Future they knew they couldnt deliver?

      May be your weakest argument yet.

      You also assume all the carpets have been lifted…

      We have the teacher shortage
      We have the widwife shortage to be factored in yet.

      Remember all those years John and Bill said there was no housing crisis? Here is 2007 for you.

      “It’s those aspects of the home affordability crisis that I want to concentrate on today” … he then used the word crisis 14 times. Funny cos he denied a crisis from the day he was elected.
      https://www.google.com/amp/s/m.scoop.co.nz/stories/PA0708/S00336/key-speech-to-new-zealand-contractors-federation.htm

      There is no moral high ground in this for anyone who recently voted for National. When you ignored their lie after lie after lie you became complicit in the appalling state of health care today.

      Between Rio Tinto , Warners , Foreign SCF investors, and the saudi businessman we could have one new facility at Middlemore

      • Baba Yaga 11.1.1

        “So the Brighter Future could have happened if only for “labour did it too”?”
        No. My message was far more subtle than that. Health is a minefield of increasing expectations, and will never be funded to the extent some would like. The reality is both Labour and national have grappled with this, and will continue to. But pinning some invented ‘crisis’ on National is about as silly as using Labour Party press releases for supporting material.

        “So once Nats saw the shortfall why did they keep promising a Brighter Future they knew they couldnt deliver?”
        NZ is considerably better off in 2018 than we were in 2008. Just as we were considerably better off in 2008 than we were in 1999.

        • One Anonymous Bloke 11.1.1.1

          Black mould isn’t an invention.

          The obvious solution is to increase government revenue. There is no alternative.

          • Baba Yaga 11.1.1.1.1

            Black mold is not new, either. And btw in many cases it can be cleaned by the occupant. Here…pass this on…https://www.howtoremoveblackmold.com/how-to-kill-black-mold/, and this https://www.wikihow.com/Clean-Black-Mold.

            The way to increase government revenue is to grow the economy. Which is what both national and labour achieved. At least Clark’s labour did.

            • One Anonymous Bloke 11.1.1.1.1.1

              Whatever, Ad Nauseam.

            • tracey 11.1.1.1.1.2

              But but but the economy has been growing for 40 years and yet… the health system

              • Baba Yaga

                “…and yet… the health system…”

                …has an unquenchable appetite, that the current inept bunch seem determined to fuel.

            • Barfly 11.1.1.1.1.3

              Hard to clean INSIDE the walls sunshine

            • greg 11.1.1.1.1.4

              all the cladding will need to be replaced at middlemore bloody hardies again Baba Yaga your not very well informed

              • Baba Yaga

                No different than the problems National inherited from Labour. Seriously, your memory must not reach beyond the very immediate past.

            • Venezia 11.1.1.1.1.5

              Dangerous stachybotris mould has been found in 90% of one of those buildings – not something you can clean off

              • Baba Yaga

                One building?

                • Michelle

                  what about the mess in our public schools yaba baba and there are many that have been left to deteriorate. The gnats don’t care cause their kids go to private schools. All part of the gnats privatisation agenda they run them down first, people become unhappy with services and they start to complain then they offer them an alternative = private providers. NZ Post was one of the best postal systems in the world until the gnats got in and set about destroying it.

                  • Baba Yaga

                    “The gnats don’t care cause their kids go to private schools.”
                    And you have proof of this?

                    “All part of the gnats privatisation agenda…”
                    What privatisation agenda? If such an agenda existed their would have been no ‘partial’ privatisation.

                    “NZ Post was one of the best postal systems in the world…”
                    No, never. That it has survived at all is a testament to them doing something right over the past 15-20 years.

        • tracey 11.1.1.2

          Not in our Health system which is the topic of discussion

          • Baba Yaga 11.1.1.2.1

            NZ is considerably better off in health than we were in 2000. Considering an aging population, the huge advances in medical technology, and the ever increasing demands of the population for access to the latest technologies, we have done very well.

            • Incognito 11.1.1.2.1.1

              Although historical comparisons have their use they don’t give the complete picture. When benchmarking internationally it becomes obvious that we must do much better and cannot and must not rely on backward-looking comparisons, e.g. https://www.radionz.co.nz/news/national/350693/australia-ahead-of-nz-in-cancer-survival-rates

              • Babayaga

                We can always do better. But health is a huge challenge, akin to a money sucking machine. And spending money on more talk feats to solve a problem like nurses wages is pathetic.

            • Michelle 11.1.1.2.1.2

              who is we yaba baba not maori and pi their stats are bad just like last time the gnats were in power. They kick the poor and destitute in the guts. Its not until the middle class start moaning when it hurts them that they try to be seen to be doing something and its usually just before the election.
              Remember there is no housing crisis, there is not housing crisis and the market will provide the market always provides.

              • Baba Yaga

                The first party to raise benefits in 40 years.
                Increases to the minimum wage annually.
                Maintained welfare and WFF entitlements despite the GFC.

                ‘We’ is NZ’ers. The last 30 years has made us better off.

        • Tamati Tautuhi 11.1.1.3

          The “Brighter Future” was a marketing slogan to win votes ?

      • Nic the NZer 11.1.2

        “So the Brighter Future could have happened if only for “labour did it too”?”

        No, underfunding the health system was bad for the economy as well as bad for NZers. Running a fiscal surplus was materially good for nobody, and purely cosmetically good for the sitting National government at the time.

    • Gabby 11.2

      And they wanted to slash revenue babby. Why, babby?

  11. UncookedSelachimorpha 12

    And tonight it is reported that raw sewage is leaking into walls at Middlemore Hospital. What a brighter future this is!

    Amazes me that none of this was being loudly talked about under the previous government – speaks volumes about the pressures they were applying, and the people they were appointing. And will cost us far more in the long run, not to mention the poor conditions for patients and staff.

    The fact people are coming forward with these problems reflects favourably on the new government – they have created a culture where these things can be talked about – while the Nats were all about shooting the messenger.

  12. Last year I contacted all the day time shows on RNZ on numerous occasions, asking if they would ask this one simple question of Joyce…

    Do you and/or your immediate family have private or public healthcare?

    I never had a response once, or heard the question asked.

    But as far as I can see, this is the pivotal point, why on earth do we (collectively) put up with having Government ministers/officials preside over and make decisions on public services that they themselves do not even use?

    It is a fucking outrage…National and Joyce’s decisions actually result in the premature death of NZ citizens (just not rich ones), that is just a fact.

    What Labour should have done is come out with a statement saying that the country can no longer afford to host the America’s Cup because of Nationals fiscal irresponsibility.
    And if you have a problem with that please take it up with your local National representative….here are their contact details for that discussion.

  13. Peter 14

    Weren’t the Key years characterised by sound economic management – controlling the government purse and to hell with the future consequences? It was his signature move, used to convince us of National’s economic brilliance. It fitted in perfectly with their traditional mantras’ of less government and less tax. Welding a stick to the supposed inefficiencies of the public service was used to justify their agenda.

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