The Government has a $3 billion surplus, it is $1.6 billion under its spending cap and has almost met its debt target – so why are we being told there is no money left for nurses?

There is simply no more money for nurses.

That has been the line that the Government has been sticking to for weeks as nurses from across the country threatened, then went ahead, with strike action.

It was a line repeated by the Acting Prime Minister, the Health Minister and the Finance Minister.

Even after nurses went on strike on Thursday and threatened they would do so again if the Government didn’t put a better offer on the table, that phrase rang out again.

“The Government has been clear that there is no money on the table to increase the salary package for nurses,” Health Minister, and Associate Finance Minister, David Clark said on Friday.

He told media in the Beehive that the Government put an extra $250 million on the table on top of the $250 million it had previously offered.

“Our ability to do that has come to an end, we have to be careful as a government that we are prepared for economic shocks and natural disasters like M. Bovis.

“We want to manage the economy prudently.”

As nurses took to New Zealand’s streets with picket signs to strike for the first time in a generation, the Labour-led Government’s mind was occupied by its commitment to its Budget Responsibility Rules.

The Government has promised to keep core crown spending at 30% of GDP and to get net debt to below 20% by 2022.

It has also promised to keep running healthy surpluses.

But looking at those numbers, it is clear the Government has billions of extra dollars to play around with.

Looking at the books

Take core crown spending. This year, that is forecast to be 28.1% of GDP – 1.9% lower than the level at which the Government’s own rules require it to remain.

The size of New Zealand’s economy is $286 billion – so as a dollar amount, the Government is under its cap by $1.63 billion dollars.

Now, to debt.

According to the latest numbers from Treasury, net core crown debt is 20.1% of GDP.

That is just 0.1% – or $286 million – under its 20% target which is five whole years away.

And when it comes to debt, the Government does not even have to pay it off to get under its 20% target.

All it has to do is make sure the economy grows faster than the rate of debt accumulation.

In fact, as a dollar amount, the Government is taking on an extra $7 billion of debt between now and 2022.

That extra $7 billion will, according to Treasury’s Budget forecasts, bring debt down to 19.2% of GDP by 2022.

Again, there is plenty of fiscal room for the Government to be spending more money here.

And that is not even taking into account the Government’s surplus which this year is expected to be $3.1 billion.

That number balloons to $7.3 billion in 2022.

So, there is no money left for nurses? You tell me.

Is the Government being too prudent?

But let’s take a look at the Government’s argument as to why it’s being so fiscally prudent.

New Zealand is a small, isolated economy vulnerable to natural disasters.

When it experiences a shock – such as the Global Financial Crisis or the Christchurch Earthquakes – it needs to be able to take on debt to help get through.

How good the Government’s books look directly affect the Government’s ability to borrow money – ie, less debt and a higher surplus means a higher credit rating.

From that perspective, it makes sense to keep the books looking good.

At the moment, both S&P and Moody’s are very happy with the books, meaning if a shock were to occur the Government would have no problem borrowing money.

And why wouldn’t it be? New Zealand’s sovereign debt levels are some of the lowest in the world. The US’s debt levels are more than 100% of its GDP, the UK is at roughly 80% and Japan’s is an eye-watering 250%.

In fact, S&P says the Government’s debt levels could be 2% or 3% higher and it would still would not affect New Zealand’s overall A-1+ rating.

And when it comes to rating New Zealand, S&P says Government debt makes up just 10% of its overall credit assessment of the country.

The issue with nurses pay is far from over and it’s likely negotiations will continue.

We don’t know how much more nurses are asking for beyond the $500 million the Government has put on the table – Clark won’t say.

But taking a good long look at the Government’s books, it is clear the Government has options fiscally. 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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81 Comments

The nurses are nicely unionised, that links to the Labour Party and they will get their money after a few ritual dances. In my view they have it already, and nicely paid for the level of work. What about all the NGOs, on starvation incomes already who can't pay their nurses the same. Increases for them ain't going to happen.

What knowledge or experience do you have to make the claim they are nicely paid for the work they do? By any measure, an experienced nurse (often with higher level degrees) on the top pay rate is underpaid relative to other jobs with similar levels of responsibility, experience and required knowledge base.

Please provide more concrete numbers. I happen to know that after a 6 year degree junior doctors start on just over $20 an hour. After a 5 year conjoint Law and commerce degree graduates start on just over $20 an hour as well.

If you compare nursing to other 3 year degrees such as social work, sports, creative arts, history or English literature how do nurse pay levels compare?
How do they compare relative to the median New Zealand wage? Can we not simply tie them to the median wage so everyone is happy?

Interesting.. According to the Assoc Salaried Medical Professionals MECA ( https://www.asms.org.nz/wp-content/uploads/2017/10/2017-2020-DHB-MECA-Si... -salary tables on page 38 of the pdf ) a level 1 medical officer starts on a minimum salary of $118k. Are you suggesting a junior doctor works approx 5900 hours a year? Thats 16 hours a day seven days a week, 52 weeks a year! (or if you take their 6 weeks a year holiday off its 18 hours a day, seven days a week for 46 weeks.)

Either our health system works junior doctors to a criminally insane level.. or your $20/hour figure is how do we say.. poppycock.

12.4.c does not refer to a graduate. It refers to a graduate who has completed 2 years as a house officer and 3 more as a registra so it is wage 5 years after graduating with a 6 year degree. In one of the most competitive and challenging fields of acedemia no less.

Fair enough, it does exclude house physicians and registrars. However your own figure of 71k/49hours is far closer to $30/hour than $20/hour.

Sorry, I looked at the wrong part of the charts 71k is registra / senior house officer starting rate.

9 years ago at a regional DHB, brand spanking new Doctors fresh out of Uni were starting on just under $80K. That may have been total including allowances. I know this because at the time I was a member of the senior management staff. I also know that all Doctors got free meals at the DHB cafe, while nurses had to pay for theirs. So i do not believe your numbers.

If they work 49.9 hrs a week a house officer gets $62,000 approx per year or roughly $23.80 per hour. If they work 75 hrs per week they get $102,000 or $26.15 per hour. With no opportunity for overtime pay.

http://www.aucklanddoctors.co.nz/media/102680/dhb_rda_rmo_meca_13feb2017...

They have a fixed meca so you can find their exact pay rates by googling it.

A house officer is a very junior doctor. My point was that after 20+ years of nursing, regardless of the level of qualification, you would still be on 67k. I dont believe nurses straight out of university are paid poorly, its those that have done everything to improve their skills and education along with experience who are very poorly paid, by any comparison.

$67k - isn't that like bang on average for someone between 40 and 50 (someone with 20+ years experience)?

"..its those that have done everything to improve their skills and education along with experience who are very poorly paid"
Well, no, that's not correct. Because they have obviously not focused on upskilling themselves in the correct areas.
If you 'upskill' in an area that doesn't represent some long term financial benefit, you derive utility from it for other reasons. Why should the tax payer subsidise that decision of individuals?

67k is a really poor salary for a professional in a country as expensive as NZ.

Perhaps in nominal terms.
But not in relative terms.
After consulting Stats NZ, I was incorrect - $67k is actually pretty much bang on the median wage for someone in their 40s.

That means that they, essentially, earn more than half of the population demographic.

Apples and pears. The median population isn't representative of those with degrees and the responsibility of peoples lives in their hands.

Part of the problem is the general public views nursing like it was in the 1960's: Dr's handmaidens, single women with good morals etc. This does not reflect what the role entails in 2018. There is more and more responsibility and education expected without the commensurate financial reward nor the staffing to support the work required.

Very few nurses have the responsibility of peoples lives.
Perhaps nurse practitioners, but not run of the mill nurses that you sympathise with.
That responsibility predominantly falls on the consulting medical officer.

Sure, a nurse's job has changed drastically. But not into a high skilled, high responsibility realm.

Commensurate reward?
How much did they get paid in private aged care? That should be a good indication of their true market value...

This isn't really an informed comment.

Nurses are the end point in the responsibility chain and generally the buck stops with them should something go wrong. Any medication given is the responsibility of the Nurse to get right, get it wrong and well.... Nurses are the final check for Doctor decisions, so must be able to operate at that level to understand what the doctors are prescribing and the ramifications of.

What about Nurse training does not make them highly skilled?

You are just proving my comment above and it really isn't the case. As an example of a 'ward nurse', The Dr is the diagnostician and will base a plan around this but the nurses must be able to interpret the plan, advise as the plan is being formed and be aware of all the ramifications as well as potential short/long term complications of the disease process. As well as this the nurse must continually assess and monitor a patient to determine all the subtle signs of deterioration.

More senior nurses are carrying out basic surgical procedures (gastroenterology nurse specialists), managing complex diabetes (diabetes nurse specialists), and being first responders/carrying out treatments to advise ambulance crews in rural areas (rural/remote nurses specialists).

Nursing is evolving rapidly and this is a good thing for everyone. Its just a shame the misinformation runs so deep.

You’re implying that nursing is an average job! I would say it is well above average in terms of required training, work levels, stress, grossness, responsibility, etc.

And you'd be right. One of the things I found the most stressful was the mask you often have to wear in front of your patients... meaning remaining cheerful, talkative and 'unbothered' while doing tasks that made me highly nauseous. I don't think it meant I was unsuited to the profession, I think everyone gets grossed out by certain things, but you have a job to do and you have to do it such that your patient doesn't feel upset or guilty about the care you are giving.

These are the so very subtle stresses and highly skilled skill-sets that all health professionals are familiar with.

Nursing is not like any other job.

Nurse Practicioners are paid about $120,000 per year (up to $150,000 per yer excl bonuses). https://www.salaryexpert.com/salary/job/nurse-practitioner/new-zealand

They are not part of the strike which includes only the “basic” nurses who do not upskill to Nurse Practicioner.

Rubbish. Nurse practitioners will be included in the strike if they are part of the NZNO. Nurse Practitioners are but one part of the senior nursing population, the rest of the senior nurses are not "basic nurses". Really, you need to be more informed on this topic before commenting.

A police officer used to start on 40K way back when
They PERFED out senior officers with a golden handshake
NZs nurses have never received the sort of paychecks the police were getting ever
NZs nurses are some of the best on the planet period
I know I’m in medicine
You’d be a very silly little country to mess up your nursing community
They work shifts all their work lives and still run households
As for comments about lawyers it’s irrelevant
Plenty of lawyers in NZ but not enough nurses hence NZ imports them

Best on the planet in terms of efficiency? Or cost ratio? How do they compare to Singaporean nurses?

It wasn't qualified, but perhaps you'd want to take a more holistic approach. How exactly is a Nurse efficient? Lack of deaths? Number of Care Plans written? PDRP's completed?

Only anecdotal, but I know a lovely Singaporean nurse, highly qualified, cancer specialist. She tried, but was unable to work here in an adult hospital ward - too small for the physical aspects of the job.

I think the reason the Government is saying that there is no more money is that we all know there are a few other public sector unions lining up for negotiations. If the nurses were an isolated case then maybe what you indicate is very true, however, what happens when the teachers come and expect just as generous offer? Who will line up after that? IRD and MBIE staff? Firefighters?

I would have thought it is very simple. There is no more money for anything! Never was, hence the massive debt across all levels of society.

Yep and basing government spending on previous GDP assumptions would be somewhat imprudent

Sure there is money, they just have to axe the student free fees bribe, Winston's foreign embassy spend-up, winter energy bribe and NZF re-election bribe fund.

It's all about priorities.

Or prioritise nurses over handouts of unneeded benefit income to wealthy over 65s.

This weird assumption that young Kiwis should incur a large debt just to be eligible for the employment market, while over 65s receive income regardless of need...well, that's particularly strange indeed.

Rick
You know why the over 65s receive income regardless of need
It’s because they’re the boomer generation A large voter block
Pity that the students weren’t an equally large voter block but eventually demographics will balance out
I don’t expect all those student loans will ever be repaid anyway

Yeah, definitely...pandered to because of voting power (and making up the politician numbers). Hence the ideals of "standing on your own two feet" being more something applied to others than oneself.

Rick, I can understand your argument that the elderly get too big a slice of the pie. Where I think you are wrong is thinking making it means tested would be beneficial. It would just be so easy to rort. If your policy was put in tomorrow then I would lose out immediately however my working wife would have 10 year to transfer wealth to famiy or just have bigger holidays and a new car so that when she turns 65 she will have the poverty needed to get the full super.

Meanwhile even today if she officially threw me out of the house I would instantly have another $100 on my super and then also be able to apply for accommodation benefit.

It's because (particulary left wing) politicians want to increase their power by taking in tax and then giving it out to people who vote for them. Clientalism is their life-blood, but is ultimately destructive for democracy (if welfare recipients become a dominant voting block) and depresses growth due to it's inefficiency.

The entire point of this article is that there is actually plenty of available money available on the government books - all those things you just mentioned have already been accounted for.

You don't think that if they had the money the CoL would spend it? They don't want to be the bad guys, but they have to manage public servant salary expectations and plan for the next 2 years of rising costs and contingencies not just the immediate crisis. So no, I disagree, there is not plenty of money, regardless of what the books might look like now. Business Confidence is at long term low, growth and revenue will fall below current predictions, inflation will rise above current predictions and welfare costs will rise, recession is highly likely. There is also a high chance of another GFC given current geopolitical crises.

The CoL are being (thankfully) prudent.

No money for nurses
Where have I heard that before ?
New Zealand

How bout we axe the non-means tested superannuation bribe instead? Thats a really expensive one.

Crappy comment

Heard a Nurse comment on Labour party Radio last night that if Peters is correct then the Junior Doctors might as well stop negotiating their settlement as there is no more money. There is and Stephen Joyce's $11 Billion or more hole will be appearing later this year.

Nurses now. Turned down (IIRC) 15% over 2 years, most likely to settle for (SWAG) 17.55%.

Then the Gubmint faces the Queue:

  • Teachers (after 16% and certainly won't settle for anything less than the NO) so maybe 17.5% over 18 months (upping the ante)
  • Police - very quiet, too quiet, something is brewing
  • Defence
  • MPI (after all, they have M Bovis to cope with and are not covering themselves with glory so will Need Mo' Munny)
  • MBIE and IRD have struck (and no-one noticed) but clearly the Peasants are Revolting
  • Then there is the long tail of Gubmint Departments most of us never encounter, and probably did not realise we were paying for...

It's gonna be fun to watch - from a safe distance....go long Popcorn....

Last nurses offer I saw was 3x 3% increases over 18 months, so a little over 9%, plus a couple of extra steps at the top of the scale. Not chicken feed, but not 15%.

And MP's pay rises

I read somewhere (but had trouble believing it) that many years ago back bench MPs earned the same as an experienced senior nurse. If true the solution is simple - restablish that link - it was a better world back then.

The nursing offer ranges from 9% to 15% and is over 3 years, negotiations have been going on for over a year. This is a fact and I know this because I am a nurse.

Dont forget that nurses haven't had a pay rise since 2016 and the most recent offer by the DHBs would only see the reg nurse pay scale rise to around 77k in august 2020 (step 7)

Some of the nurses I know who worked yesterday thought it was like going to work as work should be. Patient numbers were down so they had manageable workloads, time to take a proper lunch break and not run off their feet from start to end of shift. We have expected the nurses to subsidies increased patient throughput - by making them work harder and longer.

I have first hand knowledge of nursing, policing and fire. These other two services do nothing like the work load of our nurses, pay for no training of their own and have fraction of the their skill level. Compare the salaries, work and and academics across all three and you can see why the nurses are angry.

And that only half of it..compare allowances, higher duties allowances, training time off and paid traing and it gets even worse.

And we haven't even got to the issue of how any of these people can afford Auckland.

Is there a component of hazard pay? I've heard that there are a significant number of volunteer firefighters as well.

Paying a nurse more does not reduce their workload, make up for inadequate facilities, or stop the stupid drunks coming in every Friday night etc...

The nurses don't need more money, but the country does need more nurses.

Will paying more get more nurses - unlikely. Thankfully (for us the patients) it has never been a job focused on money.

Easily solved. Count the real cost of alcohol harm and pay for it via taxation on consumption.

Ideal for a user pay tax.
Sadly wont happen.

It's not the alcohol that is the problem, it's the people drinking it.

A whole bunch of people will leave work today and have a Friday night drink (or 2, or 3, or ....)

Only a relative handful will end up
a) in ED
b) drive drunk, and
c) committing another crime

Why tax all of them? Might as well just up tax in general.

Personally, I would say if you blow over legal limit in ED, it becomes user pays.

Why tax all of them?

Because those of us that have 1 or 2 a week can afford to pay the additional associated tax and still enjoy our lives.

The only folks who would be seriously hit in the pocket by a consumption tax are those who over-consume.

In other words, it's one of the best examples of a targeted tax that you can get.

"The only folks who would be seriously hit in the pocket by a consumption tax are those who over-consume."

Then just make them pay.

And how do you colect this money? Honesty box?

I've seen the carnage first hand. Pay or suffer. Don't even send an ambulance.

They will find away (Phone banking, EFTPOS, Cash, Internet banking), or they can lie on the street in their own vomit for all I care.

PS: Many of the ambulance services in the country do bill for call-outs, so clearly it is something that can be done.

Hate to tell you this, but drunken accidents are covered by ACC, so yes, the ambulance does charge for callouts, but we all pay. And no, we live in a civilised society, so we dont leave injured people at the side of the road in pain. The best way to collect extra revenue from alcohol users is to increase alcohol excise. Its easily administered, minimal collection cost, and the more you drink the more you pay. It wont affect light drinkers much, another $5 on a decent single malt wont bother me in the slightest, might cost me $20 a year. Another $5 on every box of cheap beer or rtds will generate significant revenue for the govt, and might slow a few drinkers down a bit.

Homebrew and theft.

Taxing the booze will not work.

Yes, the problems/objections are no different than those encountered in applying an increase in excise tax to cigarettes, and the rationale is the same.

To be fair, the concerns are valid. Go ask all the bashed shop owners.

No-one is forcing them to stock cigarettes and booze, if they think they are too atractive to criminals they should stop stocking them.

How many grow there own tobacco? Its legal for personal consumption AFAICS. You'll get the same response with homebrew, its too much like actual work for the problem drinkers. Homebrewers are more the craft beer market type, who are after quality or something different. At least thats my impression.

How many would turn to industrial solvents & cleaning chemicals before the cost & work of home brewing, answer: a lot and ain't that depressing. My home brew has always been ok, had a couple of bad batches but we often would use some for cooking with as well. In researched terms alcohol and drugs and more prevalent in the poor for a reason, they usually supplement poor medical treatment access and financial & environmental stresses.

Those are the ones that need a much better funded mental health service, and as much as I hate it in principle, the ability for the state to compel them into a treatment facility for their own good, they are beyond the point of making anything approaching rational decisions when they are sucking on a plastic bag full of silver paint.

Don't agreed. Instead penalise those who abuse the use of alcohol. Another statement of ban all problems.

combination will. the exodus is on.

There just aren't the highly trained nurses out there - and don't count the truckloads form overseas with questionable training. Nursing these days requires highly trained, quick thinking top players. It's not like shortland street.

Both of my family often come home maxed out due to patients who have come within a whisker of dying - only living because a well trained experienced nurse picked up on a what some of these new overseas semi trained 'nurses' are missing.

Living with people who are stressed out from the worry of overseeing a death makes my work stress seem a walk in the park. For those that think nurses have a job like any other are so off the mark it's pathetic.

A mistake kills people and dumping too many patients on one nurse is irresponsible and dangerous - which is a big part of what this is about.

All so very true!

If they have,as you say 'questionable training''why are they being employed.
Would also suggest that NZers don't want to be nurses.

..question should be why are they being brought in when our own graduates can't get placed?

Questionable training? NZ has some of the most rigorous councils for nursing registration anywhere in the world! I don't know how it's possible to register here as an overseas nurse with inadequate training!

If we do it only means that the world has incredibly poor standards for nursing registration. I work with nurses on a daily basis and I can tell you that some of the overseas trained nurses I've worked with are utterly incompetent. We have to encourage those industrious, motivated nurses with sought after degrees to remain in the profession and make sure those that are already there from leaving.

Nurses are not just asking for more money, but more staff which equates to better nurse/patient ratio and overall better working conditions. Paying them more will also attract more to the profession, which helps the ratio and that might reduce churn in departments which costs the health system a lot of cash in training new nurses up, only for them to burn out early, leave and then the cycle starts anew.

Nurses I know, work a damn sight harder than me for far less money. Nurses completely deserve the extra cash and better conditions. They often doesn't get a break, cant finish documentation, stay very late for handover, cant give patients care/time they need etc.

If there is no more money in the public purse and lots of people want nurses to be paid more can we not just start a give a little page for a nurse wage top up fund?

You mean tax?

If more money doesn’t attract more employes then we may as well pay everyone minimum wage!

One question i have not seen asked yet is what is the breakdown of that 500 million dollar offer - 500 million is a big number but is it actually accurate?

A good amount of it is for the increase in nurse numbers, really should not be part of the total wage increase, as headlined.

Really their pay, like teachers is so low and I do know a number of nurses who are now just working here part time every six week while their main money is six weeks block in Oz becoming more common. Double the money and more free time....there are clearly supply issues of experienced nurses.

The real reason nurses, teachers, etc are underpaid is because they stupidly have the same pay rate across the country. 67k is a pittance in Auckland but a high flyer in invercargill.

Typical Auckland centric view, there is actually a shortage of nurses in Invercargill and 67k is not a high flyer income anywhere in this country. Lets not be silly about the debate huh?

As someone who owns a couple of properties in Auckland yet does not want to live there perhaps "us" that have made the capital gains since 2011 should be paying for your lack of teachers as we are the ones who have gained and as a result crowded out an average income being useful in the super city even for rent :-)

Jason, you forget that while there may be no more money for nurses, there's plenty for the multi-billion dollar Shane Jones Slush Fund - for tourism advertising, "growing trees" and the like. Guess that takes priority.