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Room for health 'pre-election sweetener'

NZN 15/03/2017 Paul McBeth

The government's better-than-expected books give it scope for a "pre-election sweetener" to boost spending on healthcare, a sector seen as ripe for rapid jobs growth over the next four years, says economic consultancy Infometrics.

The Wellington-based researcher expects to see an extra 30,900 jobs in healthcare and social assistance over the next four years as an ageing and expanding population creates extra demand for medical services.

However, its regional perspectives report shows employment growth in the sector has lagged behind the rest of the economy, averaging a 2.1 per cent annual increase between 2013 and 2016 compared to a 2.4 per cent pace.

This reflected a contraction in government spending on health to 6.2 per cent of gross domestic product from 6.7 per cent, even as it increased on a nominal basis by $1.1 billion.

"In terms of the fiscal environment and political environment, we believe there is room for the government to increase its health spending, maybe as a pre-election sweetener," economist Garth Kiernan told a briefing in Wellington.

"It never hurts when the political race is looking a little bit tight to throw a little bit more money at health or education, so we think health is one area where we think there could be announcements in the upcoming budget."

Prime Minister Bill English has locked in this year's election for September 23 and has already announced $503 million of extra funding for police in this year's budget to be delivered on May 25.

Since then, Mr English and Finance Minister Steven Joyce have said tax cuts are in the mix for the budget.

The government last year boosted health spending by $2.2 billion over four years, the bulk of which was earmarked for the district health boards to cater to an expanding population after a prolonged period of belt-tightening.

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