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  AGENDA 6 AUGUST ANNETTE KING You said that the health budget needs a significant cash injection to tackle key health problems, can you be more specific, how much additional money would the Labour government seek? ANNETTE Over the next four years we will put an additional four billion in, we've made that clear on Budget day, that’s the additional money we will put in, however I just want to go back to your opening statements about productivity because your confidential piece of paper from Treasury would also say that at this stage they can't measure productivity in the hospital sector very well, in fact about a billion dollars of expenditure is not measured at all, the non admitted patient activity, so Treasury were making the point that many places in the world can't measure productivity in a hospital and we need to find better ways to measure it. SIMON Well they’ve measured it as far as they can and it's not looking good and I'll come to that in a moment, but you just said that you're wanting four billion dollars, you’ve got four billion dollars allocated into the future on this but you also said since the budget, you said this two weeks ago that it needs a significant cash injection, what are you talking about? ANNETTE Well I'm talking about what we're putting into it. What we've done is we've set out what the budget will be for the next four years, we've made it clear to New Zealanders where our expenditure will go, where our priorities are and I challenge other parties to do the same because at this stage National's only promised to fund up to July next year. SIMON Let's look at yours though, where are you going to get the extra four billion from? ANNETTE It's already been allocated in Dr Cullen's forward plan. We've worked out what we need over the next four years, health has a rolling health budget, we don’t have an annual budget, in fact we've had three and four year budgets so we know what money is being put in. SIMON So when you said two weeks ago that you need a significant cash injection to tackle key health issues it's already there, you’ve already got it allocated. ANNETTE Well it's not there till you get the money. SIMON But it's already allocated you're not talking on top of what is already there? ANNETTE No I'm talking about the money we've allocated over the next four years, that’s the significant increase that’s going into health and people will know what we're putting into it, and I can tell you where most of it's going. We're putting money into rolling out the rest of the Primary Health Care strategy so we have affordable access to Primary Health Care for all New Zealanders that are enrolled in PHOs. The money going into the second Mental Health Plan for mental health services in New Zealand. SIMON I'll come back to the details shortly but I want to know how much longer can you keep affording to spend at a faster rate than growth, I mean vote health money is increasing far more quickly than growth. ANNETTE Well that is a concern but in government we have had to put in a considerable amount of money to fill in the gap that appeared in the 1990s when health expenditure dropped, we've lifted it back up again so we're around about the middle of the OECD in terms of expenditure and Dr Cullen just said you couldn’t continue spending at that rate of increase going out into the future, there has to be some levelling off and that’s acknowledged but we certainly needed to put the money in to rebuild funding. SIMON When is that going to take place though because you’ve got an extra billion this year and you’ve got an extra billion over each year for the next four. ANNETTE That is levelling off actually, if you look at a graph you'll see that is levelling off. What you’ve got to understand almost 400 million a year goes into demographic adjustment and inflation adjustment before you start, so you’ve got to then put in the money that goes into primary health care, mental health services, etc. So going at the rate we were is not sustainable but you do have to have ongoing growth in health expenditure, it's expected, New Zealanders want it, and it has to happen. SIMON It can't keep going on forever though. Well let's look at some of the specifics, why when a Treasury reports tells us, the Treasury report that you mentioned a moment ago, tells us that hospital outputs went up by less than 2% in 2003/2004 over the previous year, but spending rise is 7% and it's not fudged I mean it says initial data indicates volumes are marginally ahead of plan, 1.5 to 2% greater than 2002/03, provider in governance expenditure is however – is however 7% higher than in the same time, I mean that’s quite clear. ANNETTE Yes but they also say that we don’t measure lots of things that we do in the hospital sector. Take, as I started to tell you, the one billion dollars worth of non admitted patient activity, we're not measuring that at all although we will be from next year because we now have better data. We have a lot of activity that now happens less than four hours, so patients aren’t admitted that we don’t measure, so Treasury points out that we need better measurements, they don’t know what those measurements should be but we do need better measurements. However the health sector isn’t just the hospital sector, in fact a lot of our money has gone into building a primary health sector that we needed to do, as you know that we have had money going into hospitals but we haven’t really concentrated on trying to keep people well. SIMON You are playing down the Treasury report. Why did Michael Cullen write you this letter then, it says I note “concern at the continued overspend.” That’s the Minister of Finance, Michael Cullen, my officials note “concern at the continued overspend.” ANNETTE The overspend in Health is far less than - the deficit for this year is about 18 million. We used to have deficits of over 300 million on a much smaller budget. Dr Cullen would like us to be in budget on budget year in year out, a lot of work's gone into getting our budget in line with a population based funding formula. I expect the Minister of Finance to send me messages like that, and we work hard with the District Health Boards to bring them into line. SIMON Okay let's look further at the health spending, the number of District Health Board managers has increased more than 20% over the past five years. ANNETTE The number of District Health Board managers has gone up by – in terms of the total increase in the health sector have gone up .4%, about 1500 has gone up in administration across the whole of the District Health Boards. SIMON 20% in growth. ANNETTE And that’s less than nurses have gone, less than doctors have gone up and of course we've asked District Health Boards to do what the old HFA did, so when you talk about managers and administrators you’ve also got to have in there the fact that those managers are nurses, those managers are doctors they're people who do the booking so you can come into hospital, they're the people who answer the telephones and then you cannot run a big health system without in fact having people to help run it, it's not just doctors and nurses and the increase in so-called managers and bureaucrats is less than it has been for our doctors and nurses. SIMON What's coming up in Labour's health policy? ANNETTE Well our priority will be on rolling out the primary health care strategy by 2007, that’s five years earlier than we said that we would. We certainly want to put the money into increasing the number of orthopaedic operations, the major joints, cataract operations, the second Mental Health Plan that I mentioned that has just been announced and we're putting the money in in the next four years to implement that. Oral health we're certainly look to… SIMON Okay when you say oral health just this week we heard of course that hundreds of preschoolers are waiting for months in pain for urgent surgery, what hope have they got? ANNETTE They’ve certainly got a lot of hope, unfortunately we've got a growing number of children, these are children who have to have general anaesthetics for dentistry. SIMON So what have you got for them in terms of oral health policy? ANNETTE Oh in oral health policy the best thing we could do in fact is fluoridate the water supply so that they don’t actually end up in that condition. SIMON But they are there now, what have you got for them now? ANNETTE They are there now and each District Health Board has a plan and are reducing them, for example I was in Waikato yesterday they don’t have children waiting in fact in Thames they could take anybody else's children. Each District Health Board is responsible for reducing the numbers. SIMON Those are a couple of good models but we still have the hundreds of preschoolers waiting for urgent dental treatment what have you got for them? ANNETTE Well I was just telling you but you were busy telling your own story. SIMON But you're telling me good stories, I want to know what the answer is. ANNETTE Well I was just gonna tell you. Each District Health Board is required to operate on children that need operations to have their teeth extracted. Many District Health Boards do that within the time they should, some don’t, they are required by their own District Health Plan to ensure that they do bring them into line and we monitor that they do that. SIMON Well that’s great from a bureaucratic perspective but exactly what is going to happen for these children? ANNETTE Well for many of these children they have to have a general anaesthetic and have their teeth extracted so that is – no the money goes in they have to have the theatre to put them into to extract their teeth, that is happening, we're using a mobile surgical bus as well which we now fund and that’s going to many places it didn’t go before, and one of the key things they're doing is extractions and dental treatment but that is really a last ditch effort, what we've got to do is put the effort into preventing children to being in that state. Most children aren’t in that state, that is a consequence of too much sugar in a diet and not enough dental hygiene, it's a preventable disease and the effort needs to go into preventing that rather than the ambulance at the bottom of the cliff. SIMON What about the parents all over the country who are looking at spending thousands of dollars on their children's teeth for braces, is there anything for them? ANNETTE Orthodontics have never been funded in New Zealand. SIMON And we won't be doing that in the future? ANNETTE In terms of oral health we're looking at a range of things but certainly our first priority would be rebuilding of the school dental service that has been very rundown with the closure of the training schools in the 90s so we weren’t even training dental therapists, we've now got two reopened, our first graduates out of them, but also looking at extending oral health over time. SIMON Will you offer anything on orthodontics? ANNETTE No we haven’t got anything in there at present. SIMON And nothing for this election? ANNETTE I'm not announcing our oral health policy on your programme. SIMON Minister of Health Annette King thank you very much for coming on our programme today. ANNETTE Thank you.
-------------------------------------------------------------------------------- SIMON Welcome back we're joined by our panel to discuss what Annette King just said, Jon. JON Well like she says she's not going to announce policy on your programme Simon, but you know there's a couple of times she looked a wee bit rattled round the fringes but the significant point I'd make about health in this election is that National basically abandoned it as a fruitful area of inquiry, this Health Minister has had six years without the sort of controversies that have bedevilled her predecessors and on that basis, and National themselves have had a turnover of health spokespeople, and the latest health spokesperson is in the back bench of National so it's just not an issue for National to work. SIMON Is this an issue you can't gain traction on or is there no room for them? JON Oh I just think Labour have chucked money at the problem, it is a plus for them heading into the campaign. SIMON They can't continue to throw money at the problem though it can't go on forever Gavin. GAVIN No I don’t think they can, you know they talk about a levelling off but there was an interesting fudge at the end of the interview where we don’t know whether in orthodontics they are going to throw some lollies at the mouth, and I don’t think they can afford to do that, I think they're vulnerable too on the issue of staffing and the rise of administrative staffing and I would be surprised if National doesn’t make something of that. Their administrative staff has gone up I think to a level where it raises eyebrows. SIMON Well that’s right across the spectrum though isn’t it? GAVIN Yeah perhaps I mean one thing I'm actually quite complimentary of is what they’ve done on mental health because that’s from my perspective is a sign of a civilised society when you take care of your weakest. The workforce planning issues are actually probably the most significant issue round health working into the future and there's still a lot of work to be done there in ensuring a supply of competent doctors you know into the future.
-------------------------------------------------------------------------------- SIMON Mike Moore was Labour MP for almost 25 years including three as Leader. With a background in Foreign Affairs and Trade he went on to become the Director General of the World Trade Organisation. Mr Moore is in New Zealand to speak at next week's Gateway to America Trade Summits and he's with me now. You as we said were Director of the WTO, from what you know from that job how likely is it that New Zealand will get a free trade agreement with China? MIKE Oh I think we will, and we will be the first developed country to do it which is a good thing, and I've been up there several times hopefully giving a little assistance to it. I am in the unique probably illegal position of being an advisor to governments at both ends, unpaid of course. Well it depends what the deal means. There's a lot of socalled free trade agreements which are not really free trade but they were the best we could do at the time and it's good we're doing it. SIMON How comprehensive is it likely to be? MIKE Well because the conditions of China joining the WTO was so strong there's not a lot more to do frankly, because for example in dairy the tariff's 14-15%, Japan's 700%, so go down from under 20% to zero over a period of time is a good thing but it's not as decisive as a deal with Japan or whatever, but it's a good thing to do and our team are doing the right thing and I support them. SIMON I heard an international banking specialist, specialising in Asia say that the Chinese are not as interested in it as we are that they're starting to question what's in it for them. MIKE Well that’s always true and I have a bit of a problem with free trade agreements, I'm a multi lateralist, I believe you do the big deal and it's much easier, but too often the socalled free trade agreements do the opposite they create trade diversion and the sum total of trade's frequently not raised and you have this sort of spaghetti junction of deals being struck with you know China, Asean, Asean 3, Australia, New Zealand and there's no decent rules of origin, there are inconsistencies, none of them yet have handled agriculture conclusively as they should do, none of them have ever put in a binding disputes mechanism, but they're the best thing that politicians can do at the moment in lieu of not getting a result in WTO. SIMON Bilaterals are happening because multilaterals aren’t, they're taking too long. Are they pie in the sky? MIKE No, no, every one's a decent step, and take the Latin Americans there's trained staff up, this gets the business community edgy and understanding it and take Africa where there are more and higher problems between African countries than there are with Africa and the rest of the world so these are good stepping stones. Would Australia be stronger if each state had a different tariff and tax system, would New Zealand be stronger if North and South Island had different tax an tariff systems, or the United States or Germany, and of course Germany became a powerhouse when she combined and so did the United States, which is a good answer to the ignorant arguments against this idea of trade. SIMON The proliferation of bilaterals though is going to make it even harder isn’t it, it's going to reinforce the bilaterals, so you still think it's achievable? MIKE It's achievable and it will be done, it's a question of how good it is and I think it will be good but you also you know – Singapore and Japan took six months arguing about goldfish, whether it’s an agricultural product or not, and what you can get is sort of new benchmarks. Now we didn’t give this to you in the local regional deal why should we give you this in the big deal. The other dangerous thing is the big guy always has the power. I mean everyone's knocking on the door of China and the US and Japan and Europe, very few people are knocking on the door of Malawi and Papua New Guinea and so the small guy is marginalised, it gives the big guy a lot of power, but we're doing the right thing. We should do both, we're smart enough to do both and we are doing both. SIMON At this point you're confident that we will get that trade deal with China? MIKE We'll get a deal and our team are very focused and when they go to China they are pretty focused as well. SIMON You were in the Cabinet which introduced the nuclear free legislation, from what you know now and given that the cold war has ended, do you see at all a case to revisit that? MIKE I don’t think it should be revisited. SIMON Why not? MIKE Because it's so deep in the New Zealand psyche, this is not now about nuclear it's about independence, it's about our chip on the shoulder, it's about us lecturing the world, it is more than nuclear and it's going nowhere. SIMON What price do we pay, I know you bring up the Americans. MIKE I tell American friends the nuclear issue in New Zealand's a bit like the gun wars in America, when you change your gun laws we'll probably change our nuclear law because it's so deep in our view of the world. SIMON Do you agree though that it impacts on our economic opportunities? MIKE Yes, it makes it harder for us to build friendships, and I get a little – I go to the States a lot and I tease our brothers and sisters and cousins say you know – we're not allowed to say it's a security problem but it is, but somehow you’ve managed to do a free trade agreement with Vietnam, where's the security issue there, and when's the last time Guatemala and Nicaragua or Mexico put any of their lads on the line as New Zealand is doing in Afghanistan, we're in the Gulf all the time even – yes we are there. SIMON That exposes us to the possibility of terrorism though doesn’t it? MIKE I always tried to in my time put the nuclear issue in one box and the trade and other issues in other boxes. You know I am very supportive of America. SIMON Well let's look at this trade and other issues. We understand that the State Department are currently reviewing the relationship with New Zealand, how do you think that review is likely to go? MIKE Well I don’t think I'll advance the review and do New Zealand any good if I shoot my mouth off, I think these things have to be quietly worked through. We are good friends of America I mean America still is the largest economy on the planet, China's still only as big as California, it's 112 trillion dollars plus, it's growing at the rate of 460 billion a year. I mean this seminar I'm in in Gateway, if people are interested in business they should be there. This is the big elephant in the room, and what does disturb me a little is the anti Americanism I pick up in New Zealand and round the world, I don’t think this is healthy at all, America's no more perfect than we are or anyone else is, there's good and bad there, but the smart arse and snide attitude to America I think's a little unhealthy in New Zealand. SIMON Phil Goff, are you talking about Phil Goff? MIKE No no I'm just talking of an attitude. I watched television this morning about Hiroshima Day well I've been to Hiroshima it's very moving and this interviewer challenged the Americans that they were the only people to drop a bomb. Well put things in historic context, I'd have done it in a second and so would have you given in 1945, and the truth is that more people died in the fire bombing in Tokyo, the war came to a halt within days, that was Harry Truman and that was the time, there wouldn’t have been a New Zealander at the time and thank God my brother doesn’t have to go ashore. It was a different age, it was a different age and there seems to be this sort of well I guess sole super power with all it's strengths and weaknesses, we tend to measure ourselves against your view on America. Now the nuclear issue has changed and it will change, the Green movement in 30 years will be the greatest supporters of nuclear energy with the multi billion dollar projects going on now on trying to improve nuclear energy. France gets 80% of its power, Finland, Switzerland, half their power from nuclear energy, we are lucky we don’t have to think about this for 50-70 years but by then God willing the technology will have moved on. SIMON Some might argue that may be sooner than that, but let's move on to look a the state of play at the moment, what do you think's gonna happen in the election? How do you see it playing out? MIKE I think the polls are probably right, we've got a battle on, it's head to head, the government's got a good story, unemployment low, interest rates bearable just edging up, inflation good, a stunning surplus, debt being paid down. SIMON Nevertheless it's almost certain it's going to need a coalition partner would you be happy to say the government with Winston Peters and New Zealand First? MIKE You do what you have to do nowadays in politics, I don’t like it but that’s the way it is. I mean MMP was imposed on the Germans by the allies to ensure that no single party could rule the German parliament, let's get it right that’s why it was put through, so it guarantees that you have to go into coalition, it stops anybody having too much power. Good thing some would say, generally a good thing. When we're rich as we are now there's a very strong cycle throughout the world economies, New Zealand and other countries are doing very well, this is great. I don’t know how it will work when we hit a wall and things get real hard so my thing is nobody will win the election, there'll be no election result, it's not who wins the election it's who does the deals and what surprises me is election day seems to have been cancelled we're gonna have Christmas Day and I'm going to unwrap my little package. SIMON You're not really surprised by that are you? MIKE Well I am actually because nearly every election people say where's the money coming from. We're taking prosperity for granted, this prosperity is based on the work of others and I don’t see many speeches or papers written about the jobs of the future, is it nano technology, is it aquaculture, I mean many of the jobs and wealth that’s coming to this country now are based on things we did in the 80s and 90s that a lot of New Zealanders don’t like, immigration, tourism, education as an export industry, the teachers used to be parked outside my house in Christchurch hating it, now they're making a fortune. Good luck you know, I want my team to win of course. There are huge issues, the Maori issue has not gone away. SIMON Yeah there's so much more that we've gotta watch out for, a lot of water to come under the bridge as well. MIKE Very serious stuff. SIMON Mike Moore, thank you so much for coming on the programme today, appreciate your time.
-------------------------------------------------------------------------------- SIMON Joining us again our guest commentators Gavin Ellis and Jon Johansson, Jon I'll start with you, what did you make of what Mike Moore had to say? JON Very statesman like I thought Simon. I remember I interviewed Mike back in 96 and he held a copy of Dickens' Tale of Two Cities and said it was the best of times and the worst of times and it seems that Mike's basic message is it's the best of times but be careful. SIMON Condemnatory I thought of MMP. JON Yeah and there's some sympathy there, I've seen other comments that Mike has made you know that he bemoans the lack of the sort of the maverick MP that the system doesn’t produce any more and I think that that is an element to MMP that is a wee bit frustrating is that if anything now through the party list you're getting a very bland set of more tightly disciplined party hacks coming up through which is great if you're the leader of the party but you know – and that just sheeted home to me this week with seeing – with Richard Prebble leaving parliament, the House is really losing a lot of its richness. SIMON That was one of the questions I wanted to ask him and never had the time for of course, given his background, left school at 14 you know no tertiary education, manual worker, are you seeing that person in the Labour Party any more you know it's because very very academic, apologies to the two of you, become very very academic but where's the blue collar experience now? JON Yeah that’s true and that’s why it's very interesting in fact with the politics that Dr Brash has exhibited since he took over, it's the blue collar vote that’s actually been at risk all the way through here, Labour doesn’t naturally connect to it in the way that Mike was able to and in the way that David Lange did. SIMON It has an affinity with university students and student loans but you know is that enough Gavin? GAVIN Well no I don’t think it is, but can we just come back for a moment to what he actually said. I had a different take on that. I think that what he was perhaps alluding to was the ability of a coalition to take the hard decisions in times of adversity, a single party with a majority is much more able to weather the hard times than a cobbled together government and we may well have a cobbled together government. It's less able to make those decisions that have to be made in the broader interest of the country but maybe politically dangerous. SIMON Yes he was quite statesmanlike in his response to a scenario with Labour with New Zealand First wasn’t he, I thought the expression on his face said more than the words. GAVIN Well indeed and I don’t know what taste he had in his mouth at the time. JON I agree with Gavin's point because there is a systemic thing here, I mean I know that after the last election one of the things I was very critical of was that two areas, vital areas of public policy, that the system was not able to exhibit any leadership in providing you know quality public discourse on, Treaty and race issues, foreign and defence policy, you know hey presto 2005 these are still really difficult areas where the public is not really being educated about the nature of its choices or even about the nature of the policies themselves because they’ve just become part of the sort of – you know the partisan cartilage that is playing up. Mike's last comment was the one I most picked up on because I think New Zealanders before they vote on September 17 have to contemplate the question of what will the social cohesion of this country be like if National were to win and remove Maori seats with white votes, to me that is, from an academic's point of view that is the most significant question New Zealanders should ask themselves before they vote. SIMON Do you agree Gavin? GAVIN I think that Jon's right it should be but I don’t think it will be. I think that… SIMON Come back to the back pocket will it? GAVIN You know there are too many lollies in the jar this time and I think that it's setting out to create an election choice that will be made on entirely the wrong grounds. I mean when we go into the ballot box into the booth we tend to vote emotionally anyway or the swinging voter or an emotional vote rather than a pragmatic one and there are a lot of emotional buttons being pushed. SIMON And we're back to the nuclear issue. GAVIN Although I have to say that I wondered when I was listening to Mike and I think he's right about our friendship with America it's very important, but I wonder whether we're creating, whether journalists and politicians and academics are creating a mythology about how deepseated the nuclear issue really is. Let's have a referendum. SIMON Let's have a rational debate first, but at the moment it's only emotional. JON Look, I would love to see a rational debate about their policy but you see in a sense the parties have abandoned principle, National sneaks out its defence policy yesterday afternoon and retreating from principle rather than tackle the issue right. SIMON Gentlemen thank you both very much. Transcripts are copyright to Front Page Ltd and may contain errors. They should be checked against a taped copy of the programme to ensure accuracy. Copyright to Front Page Ltd but may be used PROVIDED attribution is made to TVOne and Agenda
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