CE Report Budget Analysis 2019

CE Report Budget Analysis 2019

Budget Analysis

Ministry of Health

  • In the 2018/19 financial year the DSS budget was $1.269 billion, but they spent $1.352 billion which was an $83million overspend
  • In this coming financial year (2019/20) they plan to spend $1.345 billion and although this is a $76million increase it is $7million less overall than they actually spent in the last financial year.
  • The cost pressure funding increases in this budget ($72Million for each of the next 4 years) are short of the actual overspend in the 2018/19 year by $11million.
  • In the 2018/19 financial year $140.1 million dollars was eventually drawn on from other Health budget lines to address general disability support cost pressures and to avoid the proposed nationally coordinated plan to cut hours and support to disabled people and families.
  • In the 2019/20 financial year the budget makes provision for a total of just 126.4 million for cost pressures – that’s a 13.7million drop in funding for cost pressure purposes. To avoid significant rationing of access to services and supports, further cost pressure funding will clearly have to be sourced at some point in the next financial year.

This means that cost pressures will remain as a significant issue going forward along with increasing demand for supports and services. There appears at this stage to be little room to move in terms of addressing the key priority areas that NZDSN has been highlighting for the last 6 months:

  1. Addressing high levels of unmet need for disabled people and families (for those already in the system as well as those stuck outside it)
  2. Closing the gap between actual funding and costs for providers – the need for contract price uplifts including the implementation of the Residential Pricing Model
  3. The need to systematically invest in the development of the workforce ahead of system transformation

The impacts that we can anticipate over the coming year:

  • There will be continuing pressure on the Ministry to strictly manage access to services through various rationing strategies as part of normal business activity
  • Contract price uplifts and the implementation of the RPM appear as remote possibilities at this stage
  • The development of the workforce is likely to continue in an ad hoc fashion

In Summary, the budget is a major disappointment and at best, enables the system to limp through another financial year in its current state.


Ministry of Social Development

There is a 3.75% contract price uplift for Community Participation, VHN, transition and Business Enterprise Providers (this excludes pay equity funding contributions). While this is the first real price uplift in a decade it is still a very small investment given the level of need and the pressure for innovation.

Support Funds increases by 2.5million, however this only enables MSD to meet existing demand.

There is a 1% price uplift for Employment support providers (on top of a recent 4% increase in fee rates). There is an additional $500,000 to increase capacity in areas of high demand and to respond to groups with lower employment participation rates.

While it is important that provider costs and capacity issues are being recognised this is a very small start to the level of investment that is really needed to increase the appalling employment participation rates of disabled people.


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