The Government appears to be running into real financial pressures over this year’s Budget to be delivered in four weeks on May 30 as it moves to highlight one of the Prime Minister’s signature policies.
Opposition Leader Simon Bridges yesterday suggested that the Government’s mental health package planned for the Budget could cost as much as $1.5 billion.
The Prime Minister, Jacinda Ardern, refused to confirm the figure but POLITIK has been told separately that the package – along with another on poverty reduction — will absorb a significant slice of the new expenditure allowance for this budget.
And on Monday at her press conference, she was terse when asked whether the sums involved in meeting the proposals of the Inquiry would be quite substantial.
“It is a Budget priority, and we have flagged that,” she said.
Presumably the $1.5 billion will apply over three years – so it would work out at $500 million a year.
That will be set against an allowance of unallocated expenditure for each year forecast by Finance Minister Grant Robertson last December at between $1.6 and $2.2 billion.
So the mental health project looks like it will take up as much as 30 per cent of the new expenditure allowance and that sum is expected to be matched by the Government commitment to poverty reduction.
The clues as to how the mental health money might be spent are in last December’s Budget Policy Statement.
“He Ara Oranga – Report of the Government Inquiry into Mental Health and Addiction, found that mental health outcomes for Māori and Pacific people are worse than for the overall population,” it said.
“Additionally, a significantly higher percentage of Māori and Pacific people experience high levels of psychological stress, relative to the rest of the population.
“This evidence has strongly influenced the priorities for Budget 2019.”
But the cost of the measure will impose significant pressure on the budget process and may explain why there are beginning to be reports coming out of the Beehive of policy proposals that have been abandoned.
Some of those appear to be on the wish list of Labour’s Maori caucus.
Not only does the Government face the pressure of the mental health upgrade and the poverty reduction programme but DHB expenditure is running well into the red.
The last report of DHB financials from the Ministry of Health for the first seven months of the current financial year (to December last year) showed that the DHBs were in total deficit of $230 million.
Much of the He Ara Oranga report focussed on mental health workforce issues — simply there are not enough, and they are not well paid.
Even National recognises that it lost support because of its failure to resource the sector properly when it was in Government.
Waimakariri MP Matt Doocey, a former mental health worker, has set up a cross-party group of MPs to look at issues in the sector and it would seem likely that National will also end up advocating increased expenditure.
For Ardern it is a signature policy.
At the Davos Economic Forum, earlier this year she spoke on a panel with Britain’s Prince William on mental health.
“Unfortunately, one of the sad facts for New Zealand is that everyone knows someone who has taken their own life,” she said.
“Of course that’s only one marker of wellbeing … and so for us, this is something that affects everyone.
“For me, the issue of mental health is deeply personal.
“I have lost friends, and I wouldn’t have to look far in my cabinet to find others who have as well.”
On Monday when announcing that the Government’s response to He Ara Oranga would be delayed until nearer the Budget, Ardern said: “The response will signpost the major change of direction for the way we as a country approach mental health and addiction issues.
“But it is the Budget that will enable us to really start to deliver that change.
“So today, I want to signal that the Government’s response to the inquiry, therefore, will be announced closer to the Budget so that the public can not only see our plans for transforming our approach to mental health and addiction; they can also see how we will resource and deliver that transformation.”
The New Zealand Election Survey found that health was the third most important issue to voters — and during the campaign when Labour discussed it (which they did often) they focussed on mental health.
So though Robertson is obviously having to say no to some Ministers, Labour will seek to brand itself as the mental health party after the Budget and it will be doing that because it believes it will retain electoral support by doing it.