Nelson could be first to feature in privatisation ‘experiment’: MP

The soon-to-be rebuilt Nelson Hospital is at risk of being the first to feature in the coalition Government’s “dodgy experiment” in health infrastructure privatisation, Nelson MP Rachel Boyack says.

Boyack said she was concerned about the new coalition Government signalling that it was open to privatising parts of the health system, as the coalition agreement between National and Act committed the Government to looking at public private partnerships in the health sector.

Health Minister Shane Reti, in response to queries from Stuff, said the Government was looking closely at the sector’s major rebuilds, and keeping an “open mind” on how best to deliver healthcare to New Zealanders.

Boyack, speaking at the Nelson Rotary West Club on Wednesday night, said a public private partnership would mean “that for-profit companies would own and be responsible for maintaining our critical health infrastructure”.

This model of privately owned hospitals had not worked in the UK, where it was introduced in the 1990s, she said.

“It has been a failed 30-year experiment, now scrapped by the current Conservative government, resulting in a poor stock of hospitals and healthcare facilities right across the UK. For-profit companies often cut corners when building hospitals to maximise the bottom line, resulting in inadequate, poorly maintained hospitals.”

The argument that the government would save money in the short term was “often undone by those companies eventually going bust”, meaning governments had to pour even more money in to maintain the hospitals in the long term.

“There is a real risk that [if] the coalition Government chooses to privatise our health infrastructure, Nelson could be the first alongside Whangārei to feature as part of this ... dodgy experiment.”

Boyack said her father was a hospital chief executive in New Zealand and the UK, and had been deeply involved in the health systems of both countries.

“He's been clear with me that this funding model does not work,” she said.

The National and Act coalition agreement said that parties would investigate “build and lease-back arrangements for new hospitals”.

Reti said he was still awaiting officials’ advice about the full portfolio of Health New Zealand’s infrastructure projects, but would have a particular interest in the large-scale projects that were already under way and those recently announced.

“What I am keen to initially understand is where these respective major infrastructure builds are at, on the spectrum of project phasing, and what funding commitments have been made to date.

“The Government will keep an open mind as we investigate efficient and effective ways of delivering better healthcare to all New Zealanders.”

Boyack said New Zealanders “should not be tenants in our own health system”.

“We need not only a funding commitment from the Government, but also an ironclad commitment that our hospital will be owned by Nelsonians.”

The outgoing Labour Government announced $73 million for the first tranche of the long-awaited project in Nelson in July 2023. The planned redevelopment would see the creation of a new acute services and inpatient building that would have 255 beds, eight theatres and a larger emergency department. Currently, there were 161 beds and six theatres.

The entire project was expected to cost $1.1 billion. Enabling work, including earthworks, was planned to start this year with construction scheduled to begin in 2026.

Boyack said a modern, fit-for-purpose hospital was needed for Nelson’s growing and ageing population.

“It’s what Nelsonians desperately want and what we deserve. We are yet to hear a firm commitment from the prime minister on this,” she said.

“There is a real risk that [if] the coalition Government chooses to privatise our health infrastructure, Nelson could be the first alongside Whangārei to feature as part of this ... dodgy experiment.”

Nelson MP Rachel Boyack (pictured) speaking at the Nelson West Rotary Club on Wednesday night.