Health usually accounts for one of the largest expenditures in annual budgets, as it did in Budget 2026.

But the focus on year-on-year increases does not tell us how New Zealand’s health spending compares historically or with other countries – and most importantly, whether it is on track to meet future health needs.

We argue that without major changes to current policy settings and budgetary processes, there is no chance New Zealand can pay for the current and future health system it requires.

We recently assessed the adequacy of government health spending by comparing it historically and with other countries and found expenditure fell well behind comparable countries during the 2010s and has not caught up since.

Recently, the Ministry of Health provided the latest required expenditure data to the OECD and the true level of government funding in the 2010s was even lower than we thought.

How New Zealand fell behind on health spending

In 2009, government expenditure on health, including for Accident Compensation Corporation (ACC) cover, was 7.4% of GDP. By 2018, it had fallen to 6.6%.

These figures are likely overestimated by at least 0.5% because New Zealand is the only country among those we compared it with where private health expenditure has a GST component and, to account for this, a “fictional” GST is added to tax-funded health expenditure.

Across 16 comparable countries, public health spending rose from 7.5% to 7.7% over the same period. No other country shrunk its health expenditure as a percentage of GDP to the extent New........

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