Govt wastes $58m forcing out 2,800 health workers during funding crisis

Taxpayers have shelled out $58 million in redundancy payments to let go 2,800 health workers after the Government forced Te Whatu Ora Health NZ to slash its workforce to save money.

In data just released to the PSA under the Official Information Act Health NZ has confirmed it paid out $57.91 million to cover voluntary redundancies and early exits for non-clinical staff between 1 November 2023 and 31 December 2025. This did not include payments made in January of this year (see attached response).

During that period the PSA estimates Health NZ let go nearly 2,800 workers through cuts and voluntary redundancies (see detail in 5 January statement).

"This is a shameful indictment of the Government's reckless approach to cost cutting coming at a time of a health funding crisis - all this has done is deepen the crisis," said Fleur Fitzsimons, National Secretary for the Public Service Association Te Pūkenga Here Tikanga Mahi.

"The jobs axed were not just numbers, they included experienced administrators who kept hospitals running, public health analysts preparing us for the next pandemic and IT experts who kept vital clinical systems running 24/7. They all had more to give our public health system."

The PSA represents some 17,000 health workers including clerical and administration staff and IT experts.

"At a time of rising health needs, the Government just turned a blind eye. It claims it's pushing resources into hospitals - Kiwis don't see that evidence, but they do see long wait times at EDs and see clinicians forced to use paper and whiteboards when ageing IT systems break down.

"There is a high price to pay for losing these public health workers and it will include more IT failures, longer wait times and clinicians doing more administrative tasks.

"Bottom line, the Government forced Health NZ to spend money it didn't have to axe workers it needed to keep the system functioning well for all New Zealanders."

The $58 million health bill comes on top of the $10.2 million Callaghan Innovation paid out in axing 189 workers over a similar period including 85 scientists and researchers.

"The pattern is clear across government; spending millions to lose the expertise we desperately need.

"The downsizing of the public sector has left the Government less capable of providing the services critical to the health and well‑being of New Zealanders and less able to do the work on the challenges we face from adapting to climate change, an ageing population and a dangerous infrastructure deficit.

"Come the election in November the PSA will be urging voters to choose a government that supports a public service that makes safeguarding our future a priority."