Budget 2025 promises hospital redevelopment, longer prescriptions, new 111 mental health response

Thursday, 22 May 2025

Despite the health minister praising the latest budget as delivering “record investment in healthcare”, reaction from the sector suggests there is little to celebrate.

Policy director for the Association of Salaried Medical Specialists (ASMS), Harriet Wild, said the additional operational funding for health included in Budget 2025 is not enough to keep the public health system even at a standstill.

“What we are looking at is a cut of several hundred million dollars in real terms,” said Wild.

Baseline health spending in the budget was increased by $1.37b a year, or $5.4b in the coming four years. This brings total health spending for 2025/26 is $32.7b.

Wild said as health inflation runs higher than general inflation - because of things like an ageing population, demographic changes and changing health needs - it is calculated to be “well over 6%”.

ASMS calculated operational health funding to have increased by about 5.7%, much less than health minister Simeon Brown’s claim of “an additional 7.4% in total funding”.

Much of what is included in the health budget has already been announced before, including $604m funding for new cancer treatments and $164m to expand urgent and after-hours healthcare.

The budget also included over $1b in capital investment for redevelopments of Nelson Hospital, works on Palmerston North Hospital, construction of a new emergency department at Wellington Regional Hospital, and “increasing interim inpatient bed capacity” across the country.

University of Auckland professor of health policy Dr Tim Tenbensel said there was very little increase in health funding from Budget 2023 to last year’s budget, because a large chunk went to resolving historical claims related to the Holidays Act.

Keeping in mind the minimal increase last year, Budget 2025 did not deliver enough funding to keep up with health inflation, he said.

General Practice NZ chief executive Maura Thompson said the budget had “little to celebrate” for general practice.

“For the past three budgets, GPNZ has been calling for a significant uplift to general practice funding to begin to address historic underfunding and support sustainability. We’re waiting for confirmation of the funding package available for general practice, knowing that the general practice cost pressure increase this year is 6.4%,” said Thompson.

“There must be no repeat of last year’s situation, which shifted costs on to patients through increased fees.”

Longer prescriptions

The Budget includes $91m to fund a change that will allow people to receive 12-month prescriptions for their medicines. Currently, most medicines can only be prescribed for a maximum of three months at a time.

Brown said this creates added costs for patients who need to pay to get repeat prescriptions and added paperwork for health professionals - unnecessary for long-term medications like asthma inhalers, insulin for diabetes, and blood pressure tablets.

“From the first quarter of 2026, prescribers will be able to issue prescriptions for up to 12 months if it is clinically appropriate and safe to do so. While patients will still collect their medication from a pharmacy every three months, they will no longer need to return to their doctor for a new prescription each time,” said Brown.

He said this could save up to $105 a year in GP fees for patients who need to renew their prescriptions four times annually.

Dr Angus Chambers, Christchurch GP and chair of the General Practice Owners Association of Aotearoa New Zealand (GenPro), said while it was “hard to begrudge” patients wanting to save money on repeat prescriptions, this would mean a significant loss of income for general practitioners.

Chambers said issuing repeat prescriptions is the least of any GP’s workload, so the change would “hardly help at all” in that regard. “It is just another nail in the coffin for family doctors struggling to survive in a significantly underfunded environment.”

He also questioned why $91m was necessary to effect the change given that it would still be the same amount of medicine used every year.

Better response to 111 mental health calls

A further $28m over four years has been included in the Budget to fund the transition from police responding to 111 mental distress calls to a “multi-agency” mental health response.

Mental health minister Matt Doocey said the mental health response would include 10 new co-response teams and increased capacity of mental health telehealth services.

“We know that co-response teams work. An evaluated trial saw fewer people being taken straight to a police station or emergency department. Instead, some had their issues instantly addressed, saying this was far less stressful and frightening than being transferred directly to hospital,” said Doocey.

He said the package includes increased funding for psychology internships, stage one psychiatry registrars and peer training, as well as security for up to 12 smaller emergency departments that require security and support.

No funding for new medical school

The latest budget did not provide for any spending on a third medical school in Waikato, despite the Government last year announcing an initial cost-benefit analysis provided confidence for the project to progress to a full business case.

Wild said she was hoping this would be mentioned in the health budget given the health workforce retention and recruitment in the country. “We desperately need to educate and train more doctors in New Zealand to work here, and there's no evidence that the government is continuing to address this with any sense of urgency or plan.”

She said Budget 2025 was “a departure lounge budget”.

“Our health workforce […] is going to continue to leave New Zealand because there’s simply no real funding to support the work that they’re doing, and there’s no plan.”