Urgent Debates — Dunedin Hospital—Government Announcement

Thank you, Mr Speaker. I move, That the House take note of an item of urgent public business—that we debate the report of the new Dunedin Hospital. Thank you, Mr Speaker. All right?

SPEAKER: You’re away.

Dr TRACEY McLELLAN: Today, the Government released a report, an independent expert readiness review, on the new Dunedin Hospital. Today, the Government, via two of the Ministers—the Minister of Health and the Minister for Infrastructure—held a press conference in concert with this report and in reference to this report. But, in essence, to make their own announcements on the fact that they were no longer committed to building Dunedin Hospital, as had previously been the case.

In fact, before the election, Dr Shane Reti, then spokesperson for health in Opposition, campaigned rigorously and explicitly on the fact that not only would the National Party reverse some minor changes that Labour was making to the new Dunedin Hospital but it would be fully funded, in budget, and that they would build Dunedin Hospital as always envisioned in the beginning. Today, they poured cold water all over that. They have broken their promises not only to the people of Dunedin but the people of Otago, the rural communities of Otago, South Otago, and Southland—throughout a huge and important regional part of this country—for no other reason than some basic cost saving.

“Broken promises” is a phrase that can be bandied around, but when something as blatant as this— and something that is considered the number one issue in Dunedin and the number one issue for people throughout the South—is just dismissed as a cost-saving exercise, then I think the words “broken promises” are nothing short of incredibly accurate. The Government backtracking on this promise to fully fund and build the new Dunedin Hospital as originally promised not only breaks this promise but it leads to other consequences, particularly when we think about the erosion of health services, particularly when we think about the flow-on effects of that for the people in not only the South but for all people of New Zealand. And the audacity—the absolute audacity—those Ministers had today, to stand there at a press conference and pit other regions against the Dunedin region as a means by which to justify the fact that they are trying to save money.

The audacity of saying, “But if we build Dunedin Hospital as has already been designed; as has already been clinically approved and clinically picked over to the nth degree; as has been value-managed and reviewed and reviewed and reviewed; as has had cut all fat out of the system already. If we build you this hospital, that we’re pretty sure we can’t make any more compromises on, then the poor people of Nelson, the poor people of Taranaki, the poor people of Hawke’s Bay, the poor people of Tauranga will miss out on their regional health facilities as well.” How dare they couch this callous announcement, this cynical cost-saving exercise, by blaming it on other people and blaming it on people that may have a visceral reaction to that as if it’s their own fault?

We’ve talked about the health system erosions, but one of the things that the authors of this report, the new Dunedin Hospital review, mentioned in their review—and I would like to acknowledge the authors, there were several reviewers including the lead author Robert Rust, who I know is an expert and has many years of huge contribution to health services across Australasia. The report is interesting. It gives several recommendations across those various domains of governance, across the domains of scope and services, and across the domains of cost.

I must say, I was quite surprised that when I came to the cost recommendations, whilst almost all of it is redacted—so it’s hard for us to make definitive assumptions and have definitive knowledge about the position, but it wasn’t that emphatic. There were lots of lots of sentences that used the words “probably” and “possibly” and things like that. I think for the Government to catastrophise on the basis of this report and break its promise to the people of Dunedin and Otago is disgraceful—and Southland.

Hon Dr Megan Woods: South Island.

Dr TRACEY McLELLAN: South Island, essentially. But that’s the theme, isn’t it? Now, we also knew that there would be opposition from officials. We know that Te Whatu Ora were, essentially, strong-armed into presenting some options for cuts previously to this project, and none of them were particularly pretty. Health New Zealand’s southern leadership team had said, “Any scope reduction of any form is ill-advised” and “will increase ongoing operational costs, reduce clinical functionality, decrease the likelihood of us realising the patient flow and efficiency benefits of the New Dunedin Hospital, and lead to higher costs in the medium to long term for Te Whatu Ora.” That’s the thing when you’re trying to chop some cost out of the capital expenditure, isn’t it? Sometimes it’s the operational expenses that suffer, not to mention all the health inefficiencies that flow on.

Thinking about these very specific recommendations, the first thing that comes to mind when I looked at the report—which is considered and it has some really good advice in it—is how are the people of Dunedin going to react about this? I say Dunedin in this instance because I know on Saturday there is a rally being organised. They have endured and suffered through months, now, of uncertainty about what this new Government had planned for this development. They have heard bits and pieces of information. They have heard the Minister of Health, in particular, and sometimes the Minister for Infrastructure, talk out of both sides of their mouths, quite frankly, about promising “a” hospital for Dunedin or promising “a” service consideration for Dunedin without actually committing in the way that the previous Government had.

The outcry from the people of Dunedin—because they won’t be happy and they know that they have one tool available to them at this moment, and that is their very, very strong, their very, very concerted, and their very, very unified voice. I’m sure that if Christopher Luxon had visited Dunedin during the election campaign or during the election period, he may have had a taste of what that feels like, but given that this Government has now chosen a slash-and-burn ideology project instead of finding a way round this dilemma, I can only imagine that Shane Reti will be passing that information on to the Prime Minister about what he could expect when he visits Otago next time.

Joseph Mooney: $290 million extra.

Hon Member: Financial irresponsibility.

Dr TRACEY McLELLAN: Not really. When we think about the impact on services, I think we run a real possibility here of getting the worst of both worlds. We know—we absolutely know—the more we delay this project, the higher the costs become. When we look on the Government’s “red list”—which is now up to 20 projects nationally—and when we look and compare that to six months ago, the costs have gone up hugely. Of those same 18 comparable projects, none of which have moved off that “red list” but the amount of money that is concerned with those projects has risen by $640 million already. Sitting around and reviewing this hospital again will not do anything other than cost more money. That, therefore, leaves us in a situation where we have a lesser hospital that costs more than what we could have if we’d just done it properly in the first place.

This reminds me of the ferries debacle. A new Government coming and going, “Gosh, that’s a big price tag”—coincidentally around $3 billion—and saying, “We must scrap it”, even though they had no plan B and no ability to do anything afterwards. Now they’ve looked at this and they’ve gone, “That’s an awful lot of money” and have made a knee-jerk reaction to make the wrong decision and to put the whole project into a precarious state—let alone the community.

It’s not only about broken promises, it’s not only about the impact on services, it’s not only about the community outcry—and I look forward to joining the people in Dunedin on Saturday as they vent their expressions and they have an opportunity to react to this Government’s announcements as they can on Saturday—but it is also about looking forward to the future. If the current Minister of Health can’t get his head around an infrastructure programme and an infrastructure plan and has to make these types of decisions, then I can only feel genuinely concerned for the people of Nelson and for the people of all those other regions, not because Dunedin Hospital gets their hospital but because this Minister is not competent to make the tough decisions and to do it when needed.

Members across this House agree that the people of Dunedin and its surrounding regions deserve and need a modern, fit for purpose set of hospital facilities. Now, that commitment to the people of Dunedin was first made in 2017, and when that commitment was made, the people of Dunedin had a right to expect that by now that hospital would have been delivered. In fact, in 2018—December of 2018—the Government of the time announced that the hospital would be built in two stages, with the outpatient and day surgery building fast tracked and the larger inpatient building due to be finished either five or six years after that.

As we stand here today, in Dunedin, on the ill-chosen site for the Dunedin Hospital, there is steel in the ground but not enough progress, and we as an incoming Government have been faced with a significant set of challenges. The reality of Opposition is that you observe projects from the outside and you remain hopeful that the Government of the day has things under control, but what we found on assuming office was that the Dunedin Hospital project was anything but in control. In fact, one of the first major capital budget decisions we had to make for the health sector was to put aside an additional $300 million for the Dunedin Hospital. I would ask members opposite to desist from the false claim that we have reduced funding for this project. In fact, one of our most significant decisions was to immediately increase funding for this project in recognition of the fact that the costs have blown out so significantly that it would be impossible to deliver it without that extra funding.

What we found was a project that has in fact been plagued with problems since, I think, the most ill-fated decision—which was made in May 2018—when the Government of the day announced that the new hospital would be built on the old Cadbury chocolate factory site and parts of the surrounding blocks. Now, I know that that decision at the time seemed magical, because, for the people of Dunedin, the sadness of seeing that site unoccupied would be met with a new hospital, but actually, not much work was done to assess whether that was a good site for the new hospital. What was found—and I reference here the advice we have received from experts—was that the extraordinary cost premiums associated with the land purchase, together with the demolition costs, contaminated ground, piling difficulty, flood-level risk, and an extremely constrained construction site flanked on three sides by State highways made it an extremely unattractive project for contractors and suppliers, which further drove up construction costs. These numbers I find compelling, so I wish to share them with the House: since the 2017 business case, the cost per square meter to build the hospital has tripled, from $10,000 per square meter to $30,000 per square meter.

It is not our job in Government or my job today to lament where those poor decisions have led us. It is our job to get on and deliver a hospital for the people of Dunedin, and we have set about doing that in the most responsible manner in which we can. Today, you have seen the Minister of Health and the Minister for Infrastructure go to Dunedin to be upfront with the people there about the choices that we face. We have released the Rust report, which has objectively analysed whether or not the Dunedin Hospital project can be delivered within budget. What that report makes clear is that even with the additional $300 million that this Government is committed to adding to the existing appropriation for this project—even with that—the project is highly unlikely to be delivered on budget.

We do have a choice at that juncture. The choice that we have is that we can, on the one hand, carry on lifelessly ignorant to that fact, or we can take steps to get it back on track—we have chosen the latter course. What we have presented are two options that we are considering in good faith, and we wish the people of Dunedin to know that we are considering these two options. The first option is to revise the project specification in scope and within the existing structural envelope, and the second option is a staged development on the old hospital site, including a new clinical services building and refurbishing the existing ward tower.

Now, I have absolute clarity from members opposite that they think that there is no amount of money that would be too much for Dunedin Hospital. I put to you that that just can’t be the case, because, actually, when we make choices about the way we spend New Zealanders’ money, there are always opportunity costs and trade-offs. And the advice that we have received tells us that this project is on course to blow out millions and millions of dollars more. Now, those are millions of dollars that we wish to invest in health infrastructure. Mark my words, we will be investing more every year in health infrastructure across this country, because despite their rhetoric, the last Government wasn’t very good at getting new hospital buildings built. It wasn’t very good at actually redeveloping facilities or using money for good effect in the health system.

What we are going to do is have to do work across our hospital system: in Whangārei, in Nelson, in Tauranga, in Invercargill, where there are suboptimal facilities, where upgrades are required. The choice that we have to confront is whether it is, in that context, appropriate to let this project continue down its sad, sad path of cost blowout after cost blowout after cost blowout. The choice that we have made is to be pragmatic and upfront with New Zealanders—that it’s time, actually, for us to take some sensible steps to control those costs.

I’m going to be very interested to see whether Ayesha Verrall will stand up and tell us that she is proud of the decision making that occurred over the past six years in relation to this project, because what we have found is a pattern of actually completely inadequate planning occurring and a reluctance to confront emerging problems. What we have seen is that the last Government knew this project was going wildly off course and chose not to take steps to bring it back on track. It actively chose not to do that and instead, I believe, ultimately was pulling the wool over the eyes of both the people of Dunedin, but actually us as an Opposition, because we were not in a position to know how badly things were actually going in this project until we assumed office and were given the ability to look at all of the information about it.

One of the facts that has surprised me about it, which I can barely believe, is that the actual business case for the project was still being developed while the project was being built—I’d love to hear members opposite explain to me how that is good practice; that despite the years that had been spent on the project, there was still no clear plan for the pathology lab, no plan for the refurbishment of the existing facilities, no plan for the car parking. All of that was estimated to cost hundreds of millions more but hadn’t been included in the overall plans.

What we see is a haphazardness. I’ll tell you something that happens when you do that, which is that those who are building the project and are involved in the project see you coming—they see you coming. They say, “This is a Government that can’t even put together a business case. It can’t even be clear about the time lines for this project or what its budget parameters are.” It gives them complete ability to continue down a path of excessive costs. It’s time, actually, that we were realistic, that we were clear that every project, no matter how important, still must face some budget constraints.

I want to finish these remarks by saying this: delivering people really good health facilities so that our nurses and doctors and health workers can operate in modern facilities that allow them to effectively and efficiently deliver services is an important challenge for New Zealand. Dunedin deserves good facilities, other parts of the country too. We will invest more money in this, but we’ll also deliver plans and budgets that work.

Thank you, Mr Speaker. It has been enlightening to hear from the National Party, with two National Ministers in Dunedin today willing to say anything to get elected, but simply can’t be trusted. Because failing to confirm to build the Dunedin Hospital to its full capacity is a complete betrayal and an utter kick in the guts for Dunedin. Yes, Dunedinites are angry. Actually, they’re furious to see two Ministers shape up in Dunedin and give us what they’ve given us today. We can’t trust this Government one iota. They slither and squirm away from any clear answer.

Dunedin and the deep South community is like no other. We’re a hardy lot down South, but we deserve access to healthcare. Not leaking roofs in existing buildings. We don’t deserve stressed doctors, nurses who want to go to Australia because they can’t cope with the stress this health system is under, pathologists who don’t know where on earth they’re going to be seated or sited. This Government is bleeding our health system to death to fund trickle-down tax cuts.

Dunedin deserves a Government that works for people and planet, not this coalition of cuts. The health of our people has to come before the pockets of the wealthy, and we need desperately to invest in our health system so it’s fit to cater for all of our needs and our communities. On Saturday, we’re going to show the coalition Government exactly how we feel. Do you know what ticks me off? Suggesting that $3 billion for health for the deep South is unaffordable—$3 billion for a hospital complex, when the Government tells us that $10 billion to explore a possible tunnel for Wellington is cheap as chips. “Cheap as chips”—$10 billion to explore a tunnel for Wellington.

How much have we spent on potholes? We’re spending $5 billion on potholes. We’re spending $1.4 billion to adapt a road around the Dunedin Hospital, but not on healthcare. Do you think people are a bit mad in the deep South? You’re telling me—they are. If this Government gets one vote out of Dunedin at the next election I will be surprised because this Government has accelerated a funding crisis for universities as well, including the University of Otago. This Government’s massively slashed research funding for Dunedin’s Crown research institutes. And now we see this betrayal of every Dunedinite; they seeking to divide—divide rather than build, as promised—the Dunedin Hospital.

We haven’t yet had time to fully understand what the coalition’s Dunedin Hospital downgrade will mean because they’re slithering and squirming away from any detail. But two things are really clear: this is National’s biggest broken election promise, and it is one that they can’t shaft off to their minor coalition partners either. This is all on National. Did they even look at the cost increases that Labour was blaming on their own proposed downgrades when National loudly proclaimed and promised to deliver on a full build during the election campaign? What did Michael Woodhouse say? Michael Woodhouse, I know they kicked him out, but he said, “The South deserves a hospital [that will] be fit for purpose for generations, not a patch up job.” And that’s what we’ve got—a patch-up job by a Government that doesn’t know what they’re doing.

They’re cancelling the link between the islands and they are cancelling healthcare. So what we’re seeing today is their strategy to deflect their dishonesty by turning people against each other, by proposing that reasonable healthcare in the South is going to detract from others, when in fact this Government wants to spend money on useless projects like looking at tunnels in Wellington. This Government does not care for our communities. If this Government gets a vote out of Dunedin it’ll get Mark Patterson’s vote, perhaps. But will it get any others? I doubt it. What gives me hope is our community, and we’re not taking this sitting down. We are strong together and I look forward to joining in what will be the biggest protest march in our city for a long, long time on Saturday, because on Saturday we march for our city, we march for our region, and we march for the Dunedin Hospital.

It’s New Zealand First’s call. Let me just explain to the member Simon Court that I have in front of me an agreed process that was put together by the Business Committee earlier in the year for debates like this. I’m just following that pattern.

Thank you, Mr Speaker. I rise on behalf of New Zealand First in this debate around the Dunedin Hospital rebuild. I will not sugar-coat this. This is not the news that southern New Zealand wanted to hear today, but it is important that we are honest with them. Whilst I appreciate the passion of my colleague from down South—Scott Willis over in the Green Party—we do have to live in the real world. As a cost blowout, $3 billion is an order of magnitude above the $1.2 billion to $1.4 billion where this project started out, and the $1.6 billion when we came in—

Hon Dr Ayesha Verrall: Have you read the document?

Hon MARK PATTERSON: I have read the doc. I tell you what, Ayesha Verrall: the ill-fated December 2022 announcement where you blinked—if you had kept going, we would not have been in this position today. Your decision to rescope and delay and hit that inflation surge absolutely is the reason that we are here today, because whilst this project was beset by a litany of errors—it was the wrong site, it was incredibly expensive to buy that site, the demolition costs were incredibly high, it was contaminated, it’s flood-prone, it’s on reclaimed land, it’s had piling difficulties, and they didn’t even provision for parking. Within the rescoped work that Mr Rust has done in his report, he’s had to add in $400 million for auxiliary stuff that wasn’t originally budgeted for in the original business case, including parking for a building in the centre of the city. People need to be able to get to the hospital. As has been pointed out, this is a base hospital for southern New Zealand, so people have to travel to get there.

It does speak to the wider issue, and the Hon Nicola Willis mentioned this too, that we are having far too many cost blowouts in our infrastructure projects. We have got to get our arms around these projects and make sure that we are not facing, time after time after time, cost blowouts. It’s $3 billion here, Scott. It’s another $2 billion there; it’s another $500 million there. It all adds up. This is what we’ve got to face, particularly in an environment where we have got an economy that has been in recession for two years. That is the stark reality we face in those economic conditions, but we are taking stock of this project. There are two options, and we must make sure that there is adequate and proper provision for healthcare in Dunedin in particular.

The one thing I would like—and I’ve told this to Dr Reti—is that we also have to face some reality in the South. The growth is in Central Otago. There needs to be capacity added in Central Otago. We need to use this point to fully address that. When you’ve got 10 percent growth a year, we need to be facing that reality as well. There is also capacity within Southland, and I know the Hon Penny Simmonds is lobbying for an extra operating theatre too. So, within the South, we do deserve proper access to healthcare and adequate health facilities. This is a chance to relook at that, to look at all the options. We have two for Dunedin Hospital. That doesn’t go far enough. We need to look at provision in Central Otago. We need to look for provision in Southland as well.

Those are the options on the table, but it is the reality. It’s not a reality that I wanted to be standing up here facing—that New Zealand First wanted to be standing up here facing—but that is the reality of politics. Sometimes really tough decisions come down the pipe. Sometimes you inherit a mess. Sometimes you’re in charge of sorting it out, and this is the place we find ourselves in today. We will make sure that the provision of health in the South is where it needs to be, but the current plan does not get us there for the money that we have to spend. Thank you, Mr Speaker.

Before I call the member, can I apologise to him. We have this pre-organised list. It’s got seven columns in it, and I looked at the wrong one. I don’t like this kind of system, but there you go; it’s what we live with. My apologies again. I call on Simon Court.

Thank you, Mr Speaker. This unfortunate decision today does not preclude the people of Dunedin receiving exceptionally high-quality healthcare services provisioned by the public health system. What it is, unfortunately, is another indictment of New Zealand’s public sector agencies being unable to deliver infrastructure projects on time and within a fixed budget. It’s not too different from KiwiRail’s iReX ferry terminal project, which blew out from $700 million to over $3 billion. But let’s just explore some of the problems.

The previous Labour Government had a health Minister who went mountain biking during COVID. The next one, Hipkins, he decided to try to restructure the entire health system while the pandemic was still going. Surprisingly, while all of these things were happening, they took their eye off the ball and they said, “Look, we’ll go ahead and we’ll build Dunedin Hospital on a chocolate factory site.”—that, it turns out, was quite unsuited for the level of services, the scale of buildings and infrastructure they intended to deliver. They were hugely optimistic, the previous Government. They said that this health facility could be delivered for about $1.4 billion, and then, lo and behold, there’s been a series of cost blowouts, it’s a few hundred million more. Optimism bias crept in.

The fact that half the scope, the car park, the pathology lab, and all these other things you typically need when you run a hospital were left out, that’s another example of the dishonesty shown in the business case and project development process which has led to under-pricing and fixing a budget which—the Cabinet Ministers in the previous Government are looking at me now as if somehow this is the coalition Government’s problem. It’s their problem that they caused by failing to ask adequate questions around scope, failing to have the level of competence and professionalism that you need when you’re commissioning major infrastructure, that leads us to this place today.

Now, what the Rust report has determined is that we have a problem where, essentially, the services that the Government has committed to deliver can’t be delivered within that budget—$1.88 billion. The coalition Government increased the budget this year by $300 million, but it’s not going to be possible within that budget, apparently, to deliver what’s been committed to. I’m a civil engineer. I’ve never started a project without having the client confirm the budget. Yet, apparently, the previous Government made a series of instructions to the extent that piling was under way without a business case being approved. That is quite outrageous. I’m sure that, when a Dunedin Hospital is finally delivered, the people of Dunedin will get what they’re asking for and what they need, but it’s certainly not going to be what the previous Government signed off.

It’s also true that when it comes to scope and need, this Government has to consider the whole of New Zealand as well as the people of Dunedin and the people of Otago. It’s quite clear there is a significant growing population in Central Otago that also has significant need. We are going to have to make the most of the assets we’ve got. We’re going to have to make a dollar go further in New Zealand when it comes to health infrastructure and all types of infrastructure, and we’re going to have to make sure that we deliver with value for money in mind.

Now, in terms of the delegations that I’ve been given by the Minister for Infrastructure, Chris Bishop, it’s to look at health infrastructure through that lens of how do we get better value for money from the assets we’ve got? How do we make the most of the money we have to spend? Well, one of the ways we might do that is to say, “Well, if there is a fixed budget and there’s a time constraint—we want a new facility developed and delivered in a certain time frame—then we need to look at public-private partnerships (PPPs).”, where you can outsource the delivery risk, you can agree a fixed cost and a fixed time, and if it’s not delivered on time and to budget, that liability sits with the contractor.

Imagine if Labour had had any appetite at all to involve the private sector in actually funding, financing, and delivering this project—it’s quite likely that it would have been delivered by now within the original budget committed to. That’s an initiative that this Government’s going to take. We look forward to announcing more about our PPP policy that’s going to help health in the near future.

Today is a milestone day on the slipping away of New Zealand’s healthcare system to one characterised by cuts, cold-heartedness, and underfunding. It is a day in which we remark on the broken promise of the National Government, who campaigned on building Dunedin the hospital that it needed, and it sought those votes with such a level of cynicism we see from what’s been done today.

The people of Dunedin need a new hospital; their current hospital is unsuitable and it is unsafe—500 instances of surgical equipment being contaminated every year. It is not a suitable place to be continuing treatment for people. It needs to be replaced. The scope reductions that will be entailed by what the Government is embarking on will cause additional cost. That always happens when you build a hospital that is too small: it ends up costing you more down the line.

What I want to spend my time on today is the desperate political play that this Government has done. We’re seeing it here and we’ve seen it before. Let’s go through it step by step. This report seems, in many parts, to be a very good report—the Rust review. However, everything about the costings is blacked out.

I take no reassurance from the other side of the House when they say that there’s been a $3 billion blowout. The word “$3 billion” is not in the report; it’s nowhere. For those of you who got up with your Government talking points and said that, go into the report and try and find it. This is a manufactured crisis about the cost of this hospital. The Rust review says it probably could not be achieved within the existing appropriation—that doesn’t mean certainly; that might mean it’s a 50 percent probability or a 40 percent probability. It is certainly not the case that the Government has the right to claim that it’s going to cost $3 billion. That is untrue. Where did this figure come from? Well, I think if we admitted Chris Bishop to the gastroenterology department at Dunedin Hospital, we might be able to get a scope and find out where that $3 billion figure came from, because that is utterly made up.

This is exactly the type of process we’ve seen when this Government wants to cut healthcare: they make up a scandal. They said Health New Zealand was $1.4 billion over budget and they had to fire the board. They said it was because of back-office bloat. They said it was because there was 14 layers of management; well, we found out that was untrue. We found out that they didn’t have the organisational chart that Dr Reti said there was. We found out that they actually hired more nurses and that it wasn’t anything to do with the back-office cuts. They did that in order to justify cutting staff out of our health system, and that’s exactly what’s going on with Dunedin Hospital. They have put out a report, they are manufacturing a crisis, and then the worst thing is that they are trying to play other communities off against New Zealand. That is so dirty. It’s disgraceful.

The fact is that if this Government wasn’t so reckless with its $2.9 billion tax cuts for landlords, there would be money to meet the needs of New Zealanders—

Andy Foster: If you hadn’t been so reckless with everything, there would be heaps of money there.

Hon Dr AYESHA VERRALL: —for their healthcare. If they weren’t giving $216 million—$216 million from Dr Foster’s party—to a single tobacco party, we would be able to give New Zealanders the healthcare that they deserve.

DEPUTY SPEAKER: I think we should come back to the motion—to the debate.

Hon Dr AYESHA VERRALL: These cuts to New Zealand’s hospitals are about the bad choices that this Government has made. This is a deeply cynical political playbook that we see from them over there again and again and again. They made a bad Budget. They made reckless decisions. They bought their way into Government with tax cuts. And then, New Zealanders are paying the price.

Dunedinites are being asked to pay the price—and all the communities of Otago and Southland that that hospital will support. Well, kia kaha to the people of Southland and Otago. I learnt a lot of lessons from those people, as a medical student in the old Dunedin Hospital. One of the lessons that they taught me when I was learning to be a doctor was to take responsibility. Well, this Government needs to stop blaming other people for its problems. It needs to take responsibility. I’m looking forward to seeing all the people in Dunedin out on the street on the weekend. We can expect that this Government understands just how much the people of the southern region think that this is a broken promise.

Point of order. Thank you, Madam Speaker. Just seeking some clarification there. We’re discouraged from interrupting speeches wherever necessary, so I held off until now. There was guidance provided then to come back to the motion, and the point that was being made was around choices the Government has made in the context of potential alternative funding streams for the Dunedin Hospital. Now, there are additional speeches to come, and that, in my mind, was entirely relevant to the motion, and so I just want some clarification—

DEPUTY SPEAKER: My clarification was it wasn’t about the Government; it pointed to a specific party in the coalition Government. That’s why I made that ruling.

Hon KIERAN McANULTY: Thank you.

DEPUTY SPEAKER: OK. Thank you. Is there another call? No. Is there another call from here?

It is interesting that the Government benches don’t want to take any more calls. Now, I would like to tell a little bit of a story from my perspective about Dunedin Hospital because, of course, I’m very privileged to be the member of Parliament for the great city of Dunedin.

In Dunedin, we have a hospital, we have a tertiary hospital, and it is a training hospital for the medical school at the University of Otago, where Dr Ayesha Verrall trained some time ago. There’s never been any dispute until today when I hear from the Hon Mark Patterson that perhaps the tertiary hospital should be in Central Otago. That is a totally new thing to be hearing, because it has always been based in Dunedin, as the city that then has to do that tertiary-level care for the wider Otago and Southland regions. Of course, those areas also need hospitals, and the issue here is about the big tertiary regional hospital.

National has said lots of things about this hospital over time. One former Minister of Health said Dunedin Hospital is not going to be a long-term preeminent tertiary hospital. He went on to say there is a reality that can’t be voted away: New Zealand probably has too many doctors. Over the next 10 years, we will need fewer hospital beds than we currently do.

Hon Dr Ayesha Verrall: Who said that?

Hon RACHEL BROOKING: That was the Minister Bill English in the late 1990s talking about the health system. Of course, we remember that, when the Labour Government came into Government in 2017, the state of the infrastructure around New Zealand, the state of the hospitals—there were many stories about mould running down the walls in various hospitals around the country. We heard then from the Minister for Finance, “Oh, well, this Labour Government doesn’t know how to build things, because the whole of the new Dunedin Hospital isn’t up yet.” Well, at least Labour was building things. You can’t knock things over if you’re not building them in the first place. Now, National, to their credit, did say that they would—they recanted from what Bill English had said and they said they would build a hospital, a new tertiary hospital in Dunedin, and set up the Southern Partnership Group.

In 2017, there was the decision on the location of the new hospital, and this is an outpatients building and an inpatients building. For anybody who’s been to Dunedin recently and driven along the one ways, you will have seen the new outpatients building that looks like a finished building—it’s not finished but it’s looking good. The inpatients building is the building that the Government members seem obsessed—totally obsessing about the fact that it’s built on a former chocolate factory. It was so patronising to hear the Minister of Finance say that the Cadbury choice was somehow magical. It was not a magical choice. If anybody knows Dunedin, you know that there are many hills and there is not an abundance of flat land that is ready to be built on with significant vertical buildings. This was a choice; it was in the middle of town. It was a choice that was made. In that time, there was consenting; there was the acquisition of land as well. Of course, some of their consenting was done under a fast-tracked process that did not override environmental protections—because that can be done.

Now, at the last election, when I was standing to be the member of Parliament for Dunedin, National made many promises about this hospital. They promised that any changes that Labour had made to decrease the scope—so by two operating theatres and a positron emission tomography (PET) scanner, and some shelled beds. They said, “We’re going to undo that. Shame on Labour for making any cuts.” That was their promise. That was the spokesperson for National, Dr Shane Reti, now the Minister of Health. He came to Dunedin, he said that, and the Hon Michael Woodhouse, who was standing against me, said it over and over again. What do we get when National is in Government? We just get cuts. That is all we can expect from this Government: cuts, cuts, cuts. I look forward to seeing the people of Dunedin and the wider South on Saturday.

What a shameful day for this Government. What a shameful day to go out and election campaign to deliberately mislead voters, knowing that they had no intention of ever delivering on the promise of Dunedin Hospital. That is callous politics. It is throwing the people of the South under the bus, and now they are shamefully trying to gaslight people to say that there is this crisis that once again doesn’t exist, just to suit their political purposes.

When I go doorknocking most weeks, surveying my constituents about what is the most important issue in the electorate, what comes up first, time and time again—in every part of the electorate, whether it is in South Dunedin, whether it is Kākā Point, Balclutha, Middlemarch, right across the whole of the Taieri electorate—is access to healthcare and the new Dunedin Hospital. They are as important to the people of Taieri as the cost of living crisis, and that is because in my electorate about a quarter of the population are over the age of 60, so healthcare is really important.

When they voted last election, many of them were sceptical about the National Party promises but they desperately wanted access to healthcare. They saw the need for it, and they told me that had a very big bearing on how they voted. Well, those people will be so let down, the ones who put their faith in the National Government. The fact that many of them didn’t and that I stand here today as their representative shows that they have long memories of the type of antics that this Government has done previously, where they’ve talked up the need for a hospital and then done absolutely nothing to deliver it.

The other side, the Government, are really misleading with their narrative around this hospital, and this has been clarified as well by the former Southern Partnership chair, the Hon Pete Hodgson. He’s saying that the costs that they are anticipating of the blowout, $3 billion—his word is “absurd”. What they have done to concoct this narrative is add pathology, the car park, and a refurbishment costed at $400 million. They have talked up the problems of the site. The fact is that the hospital is not just about services; it is about the economic development and lifeblood of Dunedin being a centre of medical excellence, and that requires a hospital to have proximity to both the university and to the polytech.

All the issues that were mentioned by Nicola Willis have already been resolved. It was 2.7 percent of the total budget to do that remediation and all of that work is now complete. The land was bought actually incredibly cheaply—$11 million—because Cadbury wanted to get out of town, so there was already value for money in that purchase. It’s just so important that the hospital has the proximity to the university so that the medical school can remain the centre of excellence that we see so profoundly from Otago University.

The fact of the matter is that this Government basically hates the South Island. We’ve got plenty of evidence. They’ve destroyed the possibility, or it’s looking very likely, of having the rail-enabled ferries that will ensure that the Hillside workshop investment by the Labour Government, the revitalisation of the Hillside workshops, bringing so many jobs to my people in South Dunedin—they depend on rail-enabled ferries, and this Government is now putting that into a very big question mark. That is bad news for Hillside. They don’t care about the ramifications.

They don’t care about our roads. There are no roads of national significance anywhere around my electorate. In fact, the map from Waka Kotahi doesn’t even have the South Island on it. The worst bit is that they prefer to put the tax breaks for big tobacco forced on this National Government by a minor party ahead of the healthcare needs of New Zealanders and ahead of their promises to the people of the South, and that is the people of Dunedin, the people of Invercargill, all the people in the rural areas in between who find it so difficult to access healthcare and who have waited so long and fought so hard. Well, my message to them is make sure, wherever you are on Saturday, to come down to the Octagon at midday, put on your T-shirts, and send a message to this Government that you will not accept anything less than the hospital that they promised that they would deliver.

This is a National Party call, so I’m going to take the National Party call.

Thank you very much, Madam Speaker. We’ve heard a lot from the other side about the lack of a new hospital in Dunedin. I wonder if the members opposite might remember who was in Government for the last six years—that did not deliver such a hospital. This entire discussion would not be necessary if the Government of the day, six years ago, had gotten under way and actually built the damn thing. We’ve heard about responsibility needing to be taken in terms of what this Government had inherited, but if this Government had inherited a hospital in the first place, there would not be need for a new hospital. A bit of reality needs to be injected into the conversation.

We’ve also heard about issues having already been resolved. Well, that’s really interesting, because if the issue of needing a hospital had been resolved in the first place, again, it would be a moot point. We would not need to be having this discussion. The people of New Zealand, the people of Dunedin particularly, would have the healthcare services, the facilities that they need, that we’re hearing so much about now from people who were very quiet about it in the last six years when, patently, a new hospital was not being built.

The opportunity cost of the additional funding needed to build the hospital is such that not only is that funding not available for other aspects of healthcare in Dunedin—or, indeed, across the country—in addition, the six years wasted by the previous Government in which they were busily not building a hospital has seen construction costs raised hugely. It’s going to be very topical in the House this afternoon—41 percent increase in construction costs since 2019, a huge additional amount, even leaving aside the cock-ups and the poor decision-making in relation to this hospital particularly. And the delay, therefore, represents an opportunity cost in terms of other things that that money could have been spent on in this space or, indeed, other things to improve the lives of the good people of Dunedin.

The project, as conceived by the previous Government, was on shaky foundations, poor foundations, both literally and physically, from the very start. We are putting in additional funding. It is simply not accurate to characterise that as any kind of a cut. Dunedin does not have a hospital now that was promised by the previous Government. It will because we are promising to get on and do it. We’re going to listen to the people. We’re going to get on and do it, and, actually, they will then have the facilities they need and deserve.

First call for the available call was made by Rachel Brooking—

Rachel Boyack: Boyack.

DEPUTY SPEAKER: Boyack, sorry. Apologies—was made by Rachel Boyack.

Thank you, Madam Speaker. I appreciate the opportunity to take a call on this important issue for the people of Dunedin but also for the people of the South Island and for the people of New Zealand in terms of the investment that we need in our health infrastructure. As the MP for Nelson, I stand in solidarity with the people of Dunedin, who deserve a decent hospital that is going to serve their region and their community for decades to come.

What concerns me greatly from the Minister’s announcement today is that they are trying to use my community of Nelson as an excuse to not build the facilities that are needed in Dunedin, and yet the Minister has already made an announcement about an announcement to downgrade the rebuild of Nelson Hospital. Nelson has one of New Zealand’s most ageing and growing populations. It will be the biggest project of our generation. Labour announced the plan last year, we gave the first round of money, and the enabling work had been started, and yet the Minister had a plan to announce the masterplan for the project when he came to Nelson recently, and that decision was scrapped, and he hasn’t even taken a paper to Cabinet about Nelson Hospital. So don’t you use—

DEPUTY SPEAKER: Not “you”.

RACHEL BOYACK: Don’t the National Party dare use my community as an excuse to downgrade the facilities for Dunedin or any other community in this country. Now, my father built hospitals in New Zealand and he built hospitals in the UK—

Suze Redmayne: Shame he couldn’t build that one.

RACHEL BOYACK: He built them in your electorate, Suze Redmayne, on budget—well, close to it. It has certainly served the people of Rangitīkei—the Whanganui Hospital, which he built on time and on budget—and my message to Simon Court is that public-private partnerships do not work. They cost more money. They take more time. They cut corners and they do not deliver for the people in the community.

Now, I have a message for the National Party about health infrastructure. Look at this graph. This shows the story of which party—now they’re all quiet—delivered on capital infrastructure for health. Look at the blue graph; look at the red graph, which is significantly more. Billions of dollars to invest in the likes of Dunedin, to invest in Whangārei—which Shane Reti is also planning to pull down again—and billions of dollars of investment from Labour in health infrastructure. How much did the Government put into Budget 2024? They put in $100 million—literally nothing. Where is the money that is going to be needed to build these projects?

Hon Rachel Brooking: It’s gone to landlords.

RACHEL BOYACK: It’s gone to landlords; it’s gone to tobacco companies. Now, I might sound angry, and I’m probably the angriest I’ve ever been in this House, but I am bloody proud to be a member of a Labour Party that has a history in this country of building infrastructure, building hospitals, and investing properly in public health and saying that public health facilities for the people of New Zealand who can’t afford things like private insurance need to be top quality, and they do cost money. To pretend somehow that you can be a National Party, when Nicola Willis was advising John Key and Bill English, and she’s now following the same playbook—Nicola Willis was a staff member during the time of these little tiny blue graphs with no money, and now she’s the finance Minister who has only put $100 million in capital health infrastructure in this Budget. She has also shortchanged the entire health system by $1.4 billion for operational costs in that health system.

So, yes, I’m angry, because public health and the delivery of public health services to New Zealand is a fundamental. It is a critical, essential service for the people who desperately need those services. In my community of Nelson, I was inundated by people last week at the Home and Garden Show who are incredibly angry that the plan agreed by Labour—which was the clinically preferred option, not the best option for builders, not the best option for Cabinet, but the best option according to the medical professionals. We should be building hospitals that the medical professionals say are the best for patients, because they are the experts, and this Government is failing to listen to them. I stand here in solidarity as a Nelson MP because every single community in this country, in Aotearoa, deserves a decent public hospital. Thank you, Madam Speaker.

The debate having concluded, the motion lapsed.