Health hit as Teflon Bill strikes

Over recent years, acres of newsprint have been devoted to the electorate’s abiding affection for Prime Minister John Key, yet the esteem in which Finance Minister Bill English is held has received nothing like the same attention.

In both cases, the public’s appreciation has survived several policy misfires and the occasional brush with controversy – in English’s case, over his housing allowances a few years ago.

If Key is liked, English is just as widely respected. Key provides the charm and English the ballast to the Government, without the deputy ever looking like a threat to the man at the top.

Last week was English’s annual turn in the Budget spotlight.

Of late, he has been applauded for steering the country through the Global Financial Crisis and to within sight of a Budget surplus, without the need for the harsh austerity measures imposed in Britain.

But that achievement was made possible largely by the fortunate combination of high global dairy prices, high demand from China and Australia, and domestic economic activity and job creation driven by the Christchurch rebuild. Worryingly, all those factors are now either flat-lining or receding, without any sign of a Budget policy response.

Scant public health funding seems of particular concern.

This year’s Budget set aside $320 million in extra funding for district health boards.

Yet, the Association for Salaried Medical Specialists said that is $260m below what’s needed just to maintain the status quo in our public health system, given population growth of more than 2 per cent, rising costs for new technology and pharmaceuticals, and salaries – vital for staff retention.

After making a small (about $20m) contribution to the three new services announced in the Budget, the 20 district health boards will be left with only $300m in extra funds to share, or $15m each. Patently, that will be insufficient when – as mentioned – the health system is under serious pressure, and major health needs in the community are already going unmet.

Presumably, these kinds of stringencies will make possible the tax cuts English reportedly has in mind for 2017.

Despite the stereotype that health needs are a bottomless pit, there is little evidence the country cannot afford to pay for them.

Quite the contrary. Vote Health has been declining as a proportion of GDP since 2010, and will decline further in relative terms in the wake of Budget 2015.

Rather than being a neverending drain, public health is receiving an ever-declining share of an expanding economy.

In sum, public services are being deliberately squeezed.

To what end? Well, English did signal last week that a ‘‘ modest’’ round of tax cuts and a large increase in the Government’s discretionary spending (to $2.5b from $1b this year, and next year) are on the cards, come election year 2017. As yet, the politics of this process seem to be doing no harm at all to Teflon Bill’s reputation.