On behalf of the government, I acknowledge the very high degree of public interest around the next steps for the new Dunedin hospital.
As minister of health, I must also underline the significant responsibilities which come with the portfolio, as our government plans better health outcomes and upgraded health infrastructure now and into the future.
At all times, we need to carefully balance individual projects and consider broader system needs.
In the case of Dunedin, responsible ministers from health, infrastructure and regional development remain fully committed to carefully considering the official advice currently being prepared, within a funding appropriation which our government has already increased to $1.88billion, far in excess of what Labour has ever promised.
It may be an uncomfortable truth for Tracey McLellan and Ayesha Verrall, but far from cutting Labour’s budget for Dunedin we have only increased it.
When Infrastructure Minister Chris Bishop and I visited in September, we reinforced our commitment to delivering modern, fit-for-purpose medical facilities we know are needed in Dunedin and the South. We acknowledged positions we had previously taken which sat in a completely different context from all the information we’ve found now we are in government.
Despite the challenges we have inherited from a Labour government which presided over six years of dithering and flip-flops, we will deliver a new hospital for Dunedin.
As readers will be very well aware, this project had approved funding of $1.59b under the previous government. In March this year, our Cabinet agreed to authorise a further $290million in capital funding due to cost pressures.
That’s not a cut — it’s a commitment. And it comes in a time of fiscal challenges, including the $1.7b Pharmac fiscal cliff which the previous government did not account for either.
It is an undisputed fact that other hospitals around New Zealand are also crying out for maintenance, upgrades and new facilities.
We are genuinely concerned that upgrades to Nelson, Whangarei, Hawke’s Bay, Palmerston North and Tauranga may be at risk if the new Dunedin hospital continues to go so far over budget. Every portfolio has a fixed budget, and where we do something in one place, we may not be able to do something somewhere else.
That’s not scaremongering, as has been claimed. It’s a hard financial truth.
Our government has taken an informed approach to this project at all times. Because of our concerns, we commissioned a one-off review from independent expert Robert Rust, former chief executive of Health Infrastructure New South Wales.
The Rust Review found that ‘‘the delivery of the NDH [new Dunedin hospital] project as currently scoped and planned is probably not achievable within the approved budget and that there remains significant uncertainty as to the cost of the inpatients building’’.
Further compounding our concern has been the fact that project pricing earlier this year also came in several hundred million dollars over the hospital’s appropriation, even without including the pathology lab, refurb of existing facilities or carparking.
All these reports tell a familiar tale. This project has been troubled from the moment the site was selected in 2018 and trapped by poor decision-making ever since.
While Labour may have talked the project up again at their recent conference, no-one can take its promises seriously. Chris Hipkins’ words in Christchurch were a sad echo from seven years ago, when his party vowed to deliver a new hospital as soon as possible, with taxpayers getting the best value for money. Labour went on to fail miserably on both counts.
As Mr Bishop has said, we are incredibly frustrated by the challenges around delivering on the new Dunedin hospital, just as the people of Dunedin and its surrounding regions are.
We remain committed to finding a solution, and are now applying the long overdue rigour all taxpayers expect.
