Media Release

Tuesday 2 October 2012

Ryall can’t justify government’s DHB loans policy

Responses to OIA questions put to Tony Ryall by DSC Health Spokesman David Tranter demonstrate that this government is unable to justify their DHB loans policy which would, typically, impose total interest payments of $20 million on a $50 million loan if it is repaid over the maximum allowable period of ten years. Given the parlous state of many DHBs’ finances the only logical explanation for this policy is that government actually wish to push struggling DHBs into even worse financial situations than now exist.

DSC’s latest questions to the Minister were prompted by extracting the figures from him regarding the interest payable on funding Grey Hospital re-building which was originally costed at $38 million and which would incur interest of $15 million if repaid over ten years - now increased to the figures cited above, Mr. Tranter said.

Mr. Ryall’s responses have been evasive to the point of laughter-inducing. In reply to my first question as to where government obtain the money for DHB loans he replied, “It is appropriated by the Government and funded through the New Zealand Debt Management Office”.

To my follow-up question as to where government “appropriated” the money from he replied, “It is appropriated from Vote Health: Non-Departmental Capital Expenditure Provision of new loans to DHBs for the purposes of facilities redevelopment and other purposes agreed by the Crown including balance sheet reconfiguration”, a statement worthy of Charles Dickens' Circumlocution Office in the book ‘Little Dorrit’.

Being singularly unimpressed I then asked where Vote Health gets the money from and - ever-optimistic - I also asked why government don’t legislate to arrange DHB loans through the Reserve Bank at minimal interest to cover administration costs, Mr. Tranter said.

Mr. Ryall replied, “Treasury sources the funding from revenue such as income tax and GST and from various forms of commercial borrowing undertaken by the Reserve Bank. Ultimately the funding comes from taxpayers”. So Mr. Ryall’s circuitous answers to a simple OIA question amount to what we all know - that government “appropriates” DHB loan money from taxpayers - which obviously brings into focus my question as to why government don’t use the Reserve Bank to fund DHB loans at minimal interest thereby greatly assisting DHB finances and saving huge costs to taxpayers.

Mr. Ryall’s answer that, “Because doing so would not align with Government’s fiscal policy”, is a blatant cop-out which encapsulates the very worst aspects of blind political dogma and successive governments' bending the knee to the morally and ethically corrupt processes of the commercial banking system.

During the next election campaign the public should ask the political parties to explain why they won’t consider the finance policies long advocated by the Democrats which incorporate Reserve Bank funding at minimal interest for desirable public works such as the building of new health system facilities. And if, as in Tony Ryall's case, they say it's not their policy they should be asked "why not?" Mr. Tranter concluded.

ENDS

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