Catching Australia by 2033

The Haps

While others flung dirt in every direction, ACT had a Stellar Week of policy launches and policy achievements.

Simon Court’s tireless work on replacing the RMA moved another step, being reported back to Parliament with co-governance agreements set to be gone.

Nicole McKee’s Arms Bill advanced two stages, it is now two hours of debate away from becoming law.

Brooke van Velden’s replacement for the awful Holidays Act also moved another stage, and is expected to be finished this week.

David Seymour’s efforts on school attendance policy are paying off with Term 2 Attendance this year being the highest Term 2 since 2016.

To top it off, the Party released practical, achievable policies to unlock New Zealand’s potential.

ACT’s hunting policy would give hunters more say in managing the conservation estate in return for the considerable contribution they make.

Catching Australia by 2033

The second policy is ACT’s policy to close the medicine funding gap with Australia. It builds on David Seymour’s widely praised work to turn around Pharmac and Medsafe, so New Zealanders get more medicines, faster.

It starts with a simple observation. We can’t (easily) change the fact Australians are richer. We therefore can’t (easily) change the fact they have a much bigger health budget than us. It is a share of their considerably larger income per person.

But there’s one gap we can and should change. That is the percentage of our health budget we spend on medicines. At present we spend about $34 billion on health, but the medicines budget is only five per cent (about $1.7 billion) of that.

In Australia, they spend 12 per cent of their health budget on medicines. The average developed country spends 13 per cent.

It’s not that the overall health budget doesn’t grow. It’s increased by 9 per cent a year for the last seven years. It’s the medicines budget that’s been left behind. This year the health budget received an additional $1.5 billion, but the medicines budget received only $13.5 million of it.

ACT’s proposal is to ringfence the first one percentage point of new health spending, and put it into the medicines budget each year for seven years. At that point, New Zealand would be spending the same proportion of healthcare spending as Australia.

If medicines were five per cent of health spending, next year they would be six per cent. In 2028 they’d be seven per cent. In 2029 eight per cent, and by 2023 New Zealand would be spending 12 per cent of the health budget, the same as Australia.

Spending more on medicines would probably save the rest of the healthcare system. Since Trikafta was funded for cystic fibrosis, expensive lung transplants have become almost unheard of.

If weight loss drugs were funded, costs arising from obesity such as diabetes, kidney disease, dialysis and kidney transplants could be reduced with massive savings.

Cynics will ask ‘why is ACT proposing this before an election, when they’re already in power?’

Well, David Seymour is widely recognised for turning Pharmac around. The organisation is unrecognisable from two years ago. Racial discrimination is gone from funding formulas.

Labour left a massive hole in the Pharmac Budget, nearly half a billion dollars a year of unfunded spending. That needed to be filled in. The Government put another $150 million a year into the medicines budget, and 360,000 people have benefited from newly funded medicines.

So, it’s not like the Government has done nothing. Nor has it done enough, so far as most affected people are concerned.

What ACT released today is a simple idea. A seven percentage point gap with Australia, to be closed by one point a year for seven years. It is specific, measurable, achievable, relevant, and time-bound, like all good goals.

It doesn’t require new spending, just the forecast increases in health spending to be ring-fenced for medicines, where we are a global outlier. It’s the kind of practical, common sense solution ACT is becoming known for.

We hope all Parties will now sign up to it, so if you have the misfortune of being sick, at least it won’t be bad luck to be sick in New Zealand.