Health spending increased

Simon Wilson writes:

It ran down the public service, most obviously in health, where it spent less, as a proportion of GDP, every year from 2010.

This is a cherry picked statistic. Why does he say from 2010 not from 2008? I’ll explain.

First of all National increased health spending – in nominal terms, in real terms and in real per capita terms.

Nominal spending increased 44% from 2008 to 2017

Real spending increased 23% from 2008 to 2017

Real per capita spending increased 10% from 2008 to 2017

But what about this spending as a percentage of GDP. Well this statistic punishes you for having strong economic growth. Take 2016.

Real spending on health increased 3.7%. But GDP increased 5.2% so health spending as a percentage of GDP went from 6.15% to 6.06%.

Would you rather have a real increase of 3.7% in health and nominal GDP growth of 5.2% or a real increase of say 2% and GDP growth of 1%?

The reality is in 2010 NZ had a huge deficit. The way out of deficit is you grow the economy slightly faster than you grow spending. That is how we got debt down to cushion us now.

NZ has just gone into recession, this means that as GDP drops health spending as a % of GDP increases. But that isn’t good.

But let’s say we do want to focus on health spending as a % of GDP. Rather than cherry pick let’s take 2008 and 2017. In 2008 I calculate it was 5.98% and in 2017 5.91%. Basically the same.

The other issue of course is we should be focusing more on outcomes, not on expenditure. The reality is that cancer waiting times, ED waiting times, immunisation rates have all fallen under Labour despite extra funding.