Budget 2017: Health, housing problems 'haven't been answered'

The Budget appealed to working Kiwis with tax cuts for even for those on average incomes, but it has been criticised as deceptive and a failure on social investment.

"It's like building a more efficient ambulance at the bottom of the cliff rather than stopping people falling off," the Salvation Army's Alan Johnson told The Nation on Saturday.

"Stopping people falling off means improving our public services so they get good health, they get good education and so on.

"I think the allocations as they are, are fine. Clearly it's an incremental budget - it just adds a little bit to what exists.

"The bigger issue I think is around whether or not we've got a tax system that's fair and whether or not we could expect some people to be paying more tax in order to do things like build houses and fund a decent health system. And those questions haven't been answered in this Budget."

The Budget includes nearly $4 billion in new spending for the health sector over the next four years, including $1.54b more for District Health Boards (DHBs) and $1.5b for the care workers' pay equity settlement.

The Council of Trade Unions (CTU) estimates the Budget's health funding is $305 million short of what it needs - with shortfalls for DHBs and services like child health, mental health and disability support.

Finance Minister Steven Joyce told The Nation he disagrees. He says the question that's missing from such estimates is about whether New Zealand is getting productivity benefits as the health system expands.

He says the productivity gains being made cover the funding gap.

"We are getting significant productivity gains, and my personal belief is we can get more."

But the CTU's Bill Rosenberg says Treasury was doubtful about productivity gains from DHBs.

"Historically and worldwide experience is it's very difficult to get productivity gains out of sectors like health which are very much people-to-people - the main costs are people, and it's very hard to get productivity gains from that," he told The Nation.

"Treasury in its long-term fiscal projections reckoned they'd be doing well if they got a 0.3 percent productivity gain, and in a recent report they were doubtful DHBs were getting any productivity gains at all."

Mr Rosenberg says he thinks it's a deceptive election year Budget.

"It makes people look over here at the tax cuts, where in fact the big problem here is in our failing public services."


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