Public health expenditure

IBISWorld forecasts public health expenditure to rise by 1.3% in 2024-25, to reach $30.6 billion. New Zealand's growing and ageing population is expanding the need for healthcare. According to the Budget 2024, the New Zealand Government (Te Kawanatanga o Aotearoa) is increasing investment in health to strengthen frontline health services and shorten wait times. While overall public health expenditure is expected to increase, investment towards digital health initiatives is forecast to reduce compared to the past years. The Central Government's emphasis on enhancing health through investing in healthcare services, staff and infrastructure is expected to boost public health expenditure in 2024-25.

New Zealand's health system reform resulted in public health expenditure to jump over the past two years through the end of 2021-22. In July 2022, the Central Government abolished the District Health Board funding system (DHBs) and instead opted for a centralised health funding and management model under the banner of a new body, Health New Zealand. Two further new health agencies were created: the Maori Health Authority, responsible for improving health outcomes for Maori people and the Public Health Agency, which manage all public health works. The Budget 2022 allocated $1.8 billion in extra funding for 2022-23, as part of a broader four-year funding allocation.

Public health expenditure in New Zealand has grown over the past five years. New Zealand's ageing population has led to greater prevalence of chronic illnesses and diseases, stimulating demand for health services. The COVID-19 pandemic accelerated the effect of long-term growing trends on New Zealand's health system, which led to a surge in public health expenditure over the past few years. Following the pandemic, the healthcare sector faced heightened cost and workforce pressures. While demand for quality healthcare has expanded due to the growing and ageing population, healthcare workforce shortages, including nurses and specialist physicians and inflated medical care costs have led to rising cost pressures. Public health expenditure has elevated over the past few years in response to growing needs for health sectors. Overall, IBISWorld forecasts public health expenditure to mount at a compound annual rate of 9.0% over the five years through 2024-25.