New Zealand's public health system did not start failing in 2023 — the strain has been building for well over a decade and reached its most acute phase in the 2023-2026 term. Understanding it means starting earlier.

The long view: how it built up

• Chronic deficits. The old district health boards (DHBs) ran deficits in 12 of the 13 years from 2008, accumulating more than $3.5 billion in the red. When the system was restructured in 2022, Health NZ inherited at least $700 million of carried-over DHB deficits. Underfunding relative to a growing, ageing population is a decades-old complaint, not a new one.
• An ageing estate. Hospital buildings have been under-maintained since the 1990s — today around half the hospital estate is more than 40 years old, and historical capital investment of about $800 million a year needs to roughly double (from 0.2% toward 0.4% of GDP) just to keep pace, with around 4,900 more hospital beds projected to be needed by 2043. By 2025, 40% of the most urgent hospital repairs were not even being worked on.
• Shocks and a restructure. COVID-19 (2020-2022) piled acute demand onto an already-stretched system. On 1 July 2022 the previous Labour government abolished the 20 DHBs and created Health New Zealand (Te Whatu Ora) and a Māori Health Authority, aiming for a single national system — the biggest health shake-up in a generation.

Where it stands now (2023-2026)

The strain then peaked. Health NZ has posted some of the largest deficits in the system's history, the government installed a Commissioner to run it, and patients face long waits for emergency care, surgery, cancer treatment, dialysis, mental-health support and a GP. This matters because almost every New Zealander relies on the public system, and how it is funded, staffed and managed has become one of the defining fights of the term.

Has it improved? In parts — and mostly on paper. The annual deficit has been pulled back below what was budgeted, some mental-health access targets are being met nationally, and elective surgeries are being outsourced to clear backlogs. But most frontline measures — ED overcrowding, growing surgical and dialysis waitlists, workforce shortages and the maintenance backlog — remain under acute pressure, and the deepest problems (buildings and workforce) are decades, not years, in the making.

What's happening:

• Health NZ recorded a $722 million deficit for 2023/24 and a $947 million deficit for the year to 30 June 2025 — better than the budgeted $1.1 billion shortfall, but still deep in the red (RNZ on the 2023/24 result; Te Whatu Ora annual report 2024/25).
• In July 2024 the government sacked the Health NZ board and installed Professor Lester Levy as sole Commissioner, tasked with a turnaround worth around $1.4 billion (Beehive).
• Emergency departments are missing targets: leaked data showed major hospitals seeing well under half of patients within six hours on bad days, against a target of 95% within six hours by 2030 (NZ Herald, leaked ED data; Ministry of Health targets).
• The planned-care (elective surgery) waitlist has kept growing, with a briefing to the Commissioner noting a roughly 7% annual rise adding almost 15,000 people a year; Health NZ has turned to outsourcing simpler cases to private hospitals (RNZ on outsourcing surgery).
• Primary care is squeezed: studies found a large share of general practices closed their books at some point, and GenPro estimates hundreds of thousands of people are not enrolled with a GP. In June 2025 the government and sector agreed the largest general-practice funding uplift in over a decade, with about $180 million in new money (RNZ on practices turning away patients; Ministry of Health primary care announcements).

Mental health: the access gap

Mental health is one of the sharpest pressure points — and, on the official data, access for the people with the highest needs has gone backwards despite record investment.

• The 2019 "Wellbeing Budget" put a record $1.9 billion into mental health, but the Mental Health and Wellbeing Commission (Te Hiringa Mahara) found that by 2024 access to *specialist* services had actually declined and sat below pre-Covid levels, even as access to lighter primary and community support improved. Acute inpatient bed numbers have barely moved since 2017 (around 608).
• Young people are going backwards fastest. The Commission reported in February 2026 that about 5,000 fewer 19-25-year-olds — down roughly 20% — were accessing services than five years earlier, and only 69.6% of under-18s were seen within the three-week target (against an 80% goal) — while the share of 15-24-year-olds reporting high or very high psychological distress has climbed to around 23%, up from 7.7% a decade earlier.
• The government created the country's first dedicated **Minister for Mental Health**, Matt Doocey, and set new targets (80% of people seen within three weeks for specialist care; 80% within a week for primary care). By early 2026 it reported the national specialist and primary targets were being met and that 514 new mental-health and addiction workers had been trained — though regions like Northland and the West Coast were still below 60%.
• Critics say targets alone will not fix it. Clinical psychologist Dougal Sutherland warned the targets risk "running on hope" without the workforce and funding behind them, and Commission chief executive Karen Orsborn has repeatedly called for greater urgency for young people.
• Mental vs physical — not yet on a par. New Zealand's official, publicly-reported health targets (reinstated 1 July 2024) are all physical-health and access measures — faster cancer treatment, shorter ED stays, immunisation, and shorter waits for specialist assessment and elective surgery. Mental health got its *own* dedicated targets only days later (4 July 2024), under the country's first Minister for Mental Health — after roughly 15 years with no equivalent. And unlike the UK, which legislated "parity of esteem" between mental and physical health in 2012, New Zealand has no law requiring the two be treated as equals. The 2018 government inquiry put the burden of serious mental illness and addiction at around $12 billion a year — about 5% of GDP.

Hospitals and services under strain

Beyond the balance sheet, the squeeze shows up hospital by hospital and service by service — often where populations are growing fastest.

• Dunedin Hospital: the flagship rebuild was scaled back as costs blew out from about $1.4 billion (2018) toward $2 billion-plus. In September 2024 up to 35,000 people marched — the city's biggest protest in decades — and the confirmed design landed at 351 inpatient beds, down from the roughly 398-410 originally planned and barely above the old hospital's capacity, even as the southern population grows. Completion has slipped to 2031.
• Nelson Hospital: its George Manson block was ranked the worst-condition hospital building in the country, and senior doctors went public over staffing so thin it threatened patient safety, with the district short dozens of senior medical officers. After a community "human chain" protest, the government committed more than $500 million in Budget 2025 to redevelop it.
• Dialysis: renal services are running hot. In March 2026 Christchurch warned some patients might be cut from three dialysis sessions a week to two — which clinicians warn is unsafe — while Auckland's service runs at around 150% capacity, with some patients finishing treatment near 11pm. A sector survey found roughly half of renal units nationally are over capacity, and a nephrologist estimated the country needs about 150 more dialysis machines to match Australian service levels.
• Emergency and cancer care: EDs have hit "code red" overload repeatedly (Wellington around 575 times in the first 10 months of 2024), and specialists have warned South Island radiation oncology is at risk of "collapse", with Dunedin losing accreditation to train radiation oncologists. A national midwifery shortage has forced some birthing units to close or cut hours.

Mike King, Gumboot Friday and the $24m question

One of the term's most-debated health decisions was the government's direct funding of mental-health advocate Mike King's charity — hugely popular with the public, and a useful case study in how hard taxpayer-funded services can be to hold to account.

• The deal. Budget 2024 committed **$24 million over four years** to the I Am Hope Foundation's Gumboot Friday programme — free counselling for under-25s, delivered through an online platform where a young person picks a counsellor who is then paid about $150 a session, capped at $500,000 a month. The annual $6 million contract was renewed for 2025/26.
• The process. The money was allocated directly, without an open competitive tender, using an "opt-out" procurement clause. The Auditor-General, John Ryan, found the process "unusual and inconsistent with good practice" and said the supporting analysis "appeared designed to retrospectively justify an outcome that had already been decided" — a critique of the *process*, not a finding of wrongdoing by King or the charity. A November 2025 follow-up found the contract was by then being managed appropriately and in line with good practice — while noting the Auditor-General cannot audit a private charity's internal practices.
• Hitting the targets. To draw the full $6 million a year the charity must deliver roughly 40,000 sessions a year (about 3,333 a month). In the first government-funded year it delivered more than 30,000 sessions to over 10,000 young people — roughly a quarter short of target; because it is paid per session, under-delivery simply means less is drawn. The charity has also filed its annual return to the Charities Register late more than once (the 2023/24 return, due 30 September 2024, was filed in November).
• Why a charity, not the public system? The model pays *independent, private* counsellors per session — including counsellors the public system's own eligibility rules had excluded. In July 2025, after officials flagged risks in the fee-for-service model, the government removed that barrier, accrediting 330+ previously-ineligible counsellors to work in public mental-health services — which suggests the model was a rule choice, not something only a charity could do. A wrinkle worth knowing: "counsellor" is not a statutorily regulated profession in New Zealand (unlike psychologists and psychotherapists), so quality assurance rests on professional-body membership and the charity's own vetting rather than a public register; no independent audit has verified the counsellor headcount or each practitioner's credentials.
• Does it work? No one independently knows yet. Reporting is built around *outputs* (sessions delivered, people seen) rather than *outcomes* (whether young people actually got better). The widely-quoted "$5.70 of social value per $1" figure was commissioned by I Am Hope from ImpactLab — a social-return-on-investment consultancy founded and chaired by former Finance Minister Bill English, not a clinical or medical research body; it models economic value from assumptions rather than measuring whether anyone recovered. The charity's own before-and-after surveys (a reported lift from 28% to 66% rating their wellbeing positively) are self-reported and uncontrolled. Psychologist Dr Jess Stubbing notes there is little research on whether the short, roughly two-session model meaningfully helps — and the evidence is genuinely mixed: structured brief help works for some young people, while the "dose-response" research suggests most people need more sessions for lasting change and complex or trauma cases need many more. In fairness, this outcome-data gap is not unique to Gumboot Friday — the public Access and Choice programme is also reported mostly in access numbers rather than recovery.
• Who checks the numbers? Because I Am Hope spends well over $1 million a year, its *accounts* must by law be externally audited — but a financial audit only confirms the dollars, not that the counselling sessions actually happened or helped. The session counts that decide how much is paid are self-reported: the checks are the charity's own spot-checks and "unusual invoicing" detection, plus the Ministry matching invoices to the contract and a $500,000-a-month cap. Officials have flagged a standing risk that practitioners could "invoice for services not delivered" and possible "double counting" of clients, and two counsellors were removed for breaching procedures. The Auditor-General has said it cannot look inside a private charity — so no independent body verifies the service delivery itself. Whether charity status should ever shield publicly funded delivery from that scrutiny is taken up in "Our Questions" below.
• The personal controversy. King drew criticism in October 2024 when he said on talkback radio that alcohol could be a temporary coping mechanism for some young people in distress — remarks the NZ Drug Foundation's Sarah Helm called "really unhelpful" and Labour said warranted a funding pause. Mental Health Minister Matt Doocey disagreed ("this time he does have it wrong") but kept the funding in place, separating King's personal views from the charity's work. King — who stepped down as I Am Hope's chief executive in late 2025 and says neither he nor the charity takes "a single cent" of the funding personally — said he was describing self-medication realistically, not endorsing drinking.

Where the parties stand:

• National-led government: Health Minister Simeon Brown (who took the portfolio from Dr Shane Reti in the January 2025 reshuffle) frames the situation as a financial mess inherited from Labour's reforms, and argues the deficit reduction and waitlist outsourcing show the turnaround is working. Related government promises include more frontline nurses, new hospitals and scanners, funding more medicines via Pharmac, expanding mental health services and a new Waikato medical school.
• Labour: health spokesperson Dr Ayesha Verrall argues the crisis is partly manufactured to justify cuts, saying job cuts and underfunding have pushed waitlists backwards. She has criticised outsourcing for cherry-picking simple cases and championed access policies such as free maternity scans (Medicard) and free cervical cancer screening.
• Clinicians and unions: the Association of Salaried Medical Specialists (ASMS) and other workforce groups warn that cost-cutting risks eating into frontline services, while officials counter that record numbers of patients are still being treated.
• Te Pāti Māori and the Greens have opposed the disestablishment of the Māori Health Authority and the broader restructuring, linked to establishing an independent Māori health authority.

Note: this is a contested area where parties dispute both the figures and their causes; positions above are attributed, not endorsed.

What to watch:

• Whether the deficit can be cut toward the stated $200 million goal for 2025/26 without cutting frontline care, and whether the back-to-budget date holds at 2026/27.
• Emergency department and planned-care wait-time results in the run-up to the 2026 election, and whether private outsourcing meaningfully clears the surgical backlog.
• Whether the new mental-health targets translate into real, sustained access for young people — or whether specialist care keeps slipping while the targets are met on first-appointment numbers.
• Whether scaled-back hospital builds (Dunedin, Nelson) prove big enough for growing populations, and whether dialysis and cancer services get the capacity to stop rationing.
• Workforce trends — nurse, midwife, GP and specialist recruitment and retention — which underpin every other number.