Thank you for the invitation to talk to you and answer your questions this afternoon.  

The National government recognises the remarkable contribution that rural and provincial people make.  We have always been, and always will be, strong supporters of country people. You are still the backbone of New Zealand and our economy. 

You may not know that despite the real and unique challenges rural and provincial New Zealanders face in getting the health services they need, I am advised you are actually healthier overall than your counterparts who live in the bigger cities - unlike Great Britain or Australia or any of the overseas countries we usually compare ourselves to. 

 The new Government has inherited a health system under significant pressure in many places. Aside from the financial situation, a lot of the pressure is in workforce and hospitals in particular and many of those pressures are felt most keenly in rural New Zealand.  

Elective surgery has failed to keep up with population growth, emergency departments struggle to cope with demand, cancer waiting times have been unacceptable, DHB deficits are forecast to be over $150 million this year and there is another $600 million wanted for capital works. 

This is at a time when the Government's tax revenues are declining.I

But I have to say it is a privilege to be Health Minister in a government where the Prime Minister, the Minister of Finance and the Associate Health Ministers are all committed to a strong public health service. 

In last fortnight's Budget, Health secured around half of all new government spending - one out of every two extra dollars over the next four years.  

In the most difficult financial circumstances for generations, John Key and Bill English ensured that critical investment in the New Zealand health service.  

While we have secured an additional $750 million of new health investments for 2009/10, finance is a lot less certain for 2010/11. The next Health Budget will be very dependent on how the economy goes over the next 12 months.  

Over the next three years the economy will lose around $50 billion of output, compared with what was forecast in Budget 2008.

An operating deficit of $8 billion is forecast in 2009/10 and over $9 billion in 2010/11.  

If the economy improves, as we all hope, then we can maintain the $750 million annual increase. If the world economic situation continues to deteriorate, then the government will have to tighten its belt as well. 

What this means is that while Health has done well this year, next year will be a lot less certain. The public health service will need to ensure a strong and ongoing focus on value for money, with resources moving from administrative overhead and low priority spending into more important frontline services. 

Against this quite sombre backdrop the Government has begun delivering on its pre-election commitments around the three biggest problems in health today: workforce, workforce and workforce - a problem that is chronic in rural areas.  

We've established a voluntary bonding scheme that offers student loan debt write offs and cash incentives to encourage young midwives, doctors and nurses to stay in the country and work in hard-to-staff specialties and communities.   

When fully in place the scheme will result in around 500 doctors and 1,250 nurses and midwives each year working in either hard-to-staff specialties or hard-to-staff areas - and it will change over time to meet the changing needs in the health sector.

 Research shows that the longer new graduates stay in a community or specialty during their training years, the more likely they are to stay on once their training is complete.  So getting graduates into rural communities is a priority and we've included DHBs with large rural areas such as Northland, Tairawhiti and West Coast in the scheme.   Working on the same principle, we are also establishing a fund to help rural GP practices take on rural immersion students.  

I was pleased last week to announce an extra $48 million over four years for ambulance services - this will pay for 100 new paramedics which will improve the rates of double crewing on ambulances.   It will also include extra money to train more rural volunteers - recognising their considerable contribution to our emergency services - and a further million dollars a year to boost funding for air ambulances who are heavily reliant on community fund raising.   

We're also putting $4 million into training for doctors, nurses and other health professionals who work in rural areas. 

And we have retained the Rural Innovation Fund - which offers grants of up to $50,000 for innovative projects that bring about improvement for rural communities.   

The Ministry of Health is working in collaboration with rural health professionals to - together- look for ways to best use health funding. It is vital that the rural frontline health services get the maximum benefit for their funding.  

We understand that rural communities' ability to get to and make use of health care services is an ongoing concern for you. Your communities will greatly benefit from the Government's focus on further developing primary health care through the development of Integrated Family Health Centres and the shifting of secondary health services into primary health care.  We want GPs with specials skills to be able to provide a wider range of services in their clinics.  

The government is also investing in a national expansion of information and communication technology. Better faster broadband will help health professionals - especially in rural areas - talk to each other and therefore make better decisions before referring their patients to secondary care.  This reduces the need for patients to travel long distances to outpatient clinics.  

Although - if patients have to go - we have raised the travel allowance that patients can claim under the National Travel Assistance Scheme by - if I remember correctly - around 40%.  I know this still doesn't cover the actual cost of travel but in tough financial times every extra bit helps.  

Overall the government is funding more medical student places, and GP training places. We're investing $70 million in additional training and education to staff our dedicated elective surgery super centres. And we're working to improve job satisfaction by insisting DHBs re-engage their frontline health staff in the planning and running of health services. 

The Government has also begun delivering on commitments in maternity, medicines, aged care and hospice. 

We've worked with the Green Party on the Home Insulation Programme: a campaign to fit homes built before 2000 with insulation and clean heating devices such as heat pumps and approved wood burners. About 180,000 households will be eligible for grants of up to $1,800 regardless of income. Community Service Card holders will be eligible for grants of up to $3,000.  

Vote Health is contributing $100 million to the $323 million programme that will make a real difference to improving the health of tens of thousands of kiwis.  

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The Government has many objectives for the next three years and I'd like to mention four of them.   

• 1. We are working to turn Health away from its current downhill track to financial crisis - deficits of $160 million growing to $200 million if action isn't taken. Over $600 million of capital demands with few funds to meet those demands. We have given DHBs extra money in this budget to address those deficits.  


• 2. We want a sea change in Health that re-asserts the importance of clinical leadership and clinical networks. This underpins our approach. The National Government is completely supportive of the country's clinicians and specialists getting together in networks to optimise and maximise the value of the good work they do around the country. Better communication and cooperation between more engaged clinicians across the country will be of special benefit I think in solving the isolation and workforce challenges we face in rural New Zealand.  


• 3. We've a strong focus on lifting elective surgery performance. Over the past nine years, despite a doubling in the health budget, elective discharges increased an average of only 1,400 a year. We want to lift that to an average increase of 4,000 discharges a year: from 118,000 in 2007/8 to a minimum 130,000 by June 2011. This will help us keep up with ageing and population growth. We have funding to commence building 20 dedicated elective theatres and to start training up to 800 additional doctors and nurses to staff them.  


• 4. We want to move to a regionally/sector-driven public health system, as opposed to a command and control Wellington-driven system. The previous Government thought Wellington could make everything happen and therefore needed more of the resources. I want to see DHBs work much more closely locally and regionally. This will benefit them all but in particular, the smaller more vulnerable boards. I will help them to do that.  

The government is committed to supporting rural communities and rural health professionals as they work on the frontline of rural primary care.   

Better, sooner and more convenient health care is our vision. It is a vision for all New Zealand.  

We recognise the challenges facing rural health. And we look forward to a constructive relationship with you as the Government works to meet the challenges facing us all. Thank you.