Health New Zealand has been quite economical lately.  

I don’t mean ‘economical’ in the fiscal sense, of course. This is the public sector we’re talking about. No, like any good government agency, Health NZ has been spending like a drunken sailor on shore leave. Indeed, when it comes to financial extravagance, the organisation is an overachiever.

Health NZ has been racking up deficits of about $130 million a month. If not for the intervention of its Minister, the agency may well have achieved $1.4 billion in red ink by the end of the 2024/25 financial year.

Pulling that off would have been a truly impressive feat, even by public service standards. Unfortunately for Health NZ, though, Minister Shane Reti is not impressed.

Like a curmudgeonly Dad arriving home to find his teenage kids and their mates wrecking the joint, Reti has called time on the party. He has called in Professor Lester Levy as commissioner to supervise the clean-up. The Professor is tasked with sorting out Health NZ’s financial and governance messes.

But what has Dr Reti so upset you may ask. Sure, Health NZ has accumulated a bit of debt, but the real problem seems to be that its escalating fiscal disaster took the Minister by surprise. If there’s one thing Ministers hate, it’s nasty surprises.

According to Dr Reti, “Health NZ first reported a deteriorating financial position to me in March 2024, despite earlier repeated assurances by the organisation that it was on target to make savings in 2023/24.”

That brings us back to Health NZ’s concept of economy. If what Reti says is so, then Health NZ has been rather more economical with the truth than with its spending.

To cut Health NZ some slack, its Board may have been unaware that its finances were spiraling into the abyss. Dr Reti commented that “limited oversight of financial and non-financial performance” left the Board “unable to identify risks until it was too late.”

So, Hanlon's razor may apply. Even so, the Board’s assurances to the Minister were honest in the manner of a blindfolded driver in charge of a speeding car with dodgy brakes and wonky steering promising not to crash.

Other government organisations would do well to take heed of this cautionary tale. The spending party of recent years is over. Those failing to take note may find themselves being prescribed some of the good doctor's medicine.