Gordon Campbell on DHB deficits and free trade

Currently the world is looking on aghast at the Trump administration’s plans to slash Obamacare, mainly in order to finance massive tax changes that will deliver most of their gains to the wealthy. Lives will be lost in the trade-off. Millions of Americans stand to lose access to the healthcare they need.

Spot the difference with New Zealand, where DHBs are under intense pressure to reduce deficits within a climate of chronic underfunding. That’s being done mainly so that a National government can finance a tax cuts package in election year where the benefits will disproportionately accrue to middle and upper income earners. Lives be lost or debased in the trade-off, as services continue to be squeezed in a climate of rising unmet need.

The government’s response has been to claim that more money – record amounts of it! – is being poured into the health system. The language is deliberately misleading. You would expect ‘more’ money to be allocated each year, purely in response to inflation and demography. ‘More’ money is needed simply to stay afloat. The point is whether the relative amount of funding is sufficient, given the drivers of (a) population growth (b) inflation (c) the greater pressures an ageing population puts on health services and (d) the rising costs of health treatment. The reality is that the public health system is being systematically underfunded, and has been forced to cope with a smaller share of the nation’s wealth – health funding as a ratio of GDP – since 2010.

Until recently, Dunedin hospital (and Southern DHB) has been Ground Zero of these dire trends.

This week, Canterbury DHB has been in the spotlight to cut costs, despite its post-earthquake challenges and the rapid population growth in the community it serves. Briefly: former CDHB chairman Mark Solomon has warned that ‘significant service cuts of unprecedented scale’ would be needed to meet the deficit reduction targets being mooted. Originally, that deficit was expected to be $61 million, reduced to $53.8 million when the annual plan was submitted, and then further reduced to a current figure of $51.8 million.

Not enough of a reduction effort for this government, not by a long shot.

In December, Health Minister Jonathan Coleman wrote to the CDHB that he was expecting a deficit of only $17 million, and this turnaround was somehow to be achieved ‘without reductions in frontline health services.’ Currently, the CDHB and Wellington bureaucrats are in negotiations to find a workable compromise. An already stretched public health delivery system is being put under further pressure to cope, with less than it needs merely to maintain the current level of services.

So… more treatments will be deferred, more patients will be discharged more quickly, and many people in need of care will not receive it – even if early diagnosis and treatment would save money in the long run. Repairs and maintenance to DHB assets will continue to be deferred. In the process, the health professionals providing the frontline care will continue to burn out from overwork, and will either leave or – in the case of overseas specialists – will choose not to work in the New Zealand health system, given its toxic mixture of underfunding and overwork.

As mentioned, the underfunding of health is part of a deliberate process that the current government is depicting as being a managerial virtue:

While the Government’s long-term objective is to keep core Crown spending below 30% of GDP, it is diving even further. In 2015/16 it had dropped to 29.2% of GDP; by 2020/21 it is forecast to be 27.5% of GDP. It is likely, therefore, that health spending as a proportion of GDP will also continue to fall.

Enjoy those tax cuts, if National delivers them at its campaign launch on Sunday. But they’re being financed on the back of a failing health system. There’s a cost involved.

Free trade, free trade.

National also released its trade policy yesterday.

In real terms this consisted of little more than watching Trade Minister Todd McClay walk around in a circle chanting ‘free trade, free trade, free trade’ while thumbing through an atlas of all the countries with which he’d really, really like to negotiate a Free Trade Agreement sometime during the next 15 years. That would be: “the European Union, the UK post-Brexit, Sri Lanka, and the Mercosur alliance of Brazil, Argentina, Paraguay and Uruguay.” Wouldn’t it be great to have 90 % of our export trade covered by FTA’s sometime around…what about 2030? That’d be so cool, right?

In other words, National’s trade policy agenda is just a vision statement, dressed up to impress the business lobbies who are still living the TPP dream, circa 2010. The agenda’s main political use is as a tool to attack Labour for allegedly being hostile to free trade. That’s pretty amusing, given that the majority of Labour’s parliamentary caucus is pro free trade. More to the point, it was a Labour government that negotiated this country’s FTA with China, which has been the flagship of New Zealand’s trade policy for the past 15 years. National may paint itself as the champion of free trade, but in nine years, it has achieved next to nothing on the international trade front, with the South Korea FTA being its only big ticket item.

Supposedly, we are going to reap major gains from soldiering on with the TPP minus the United States. Dream on. At most, such a deal would give us only the same access to some Japanese farm markets as the one that Australia currently enjoys. Don’t hold your breath for the blessings that would deliver. Routinely and regrettably, trade deals are massively over hyped.

Here’s a reality check. Just how many jobs would the original TPP have delivered to the US, which was the main driver of the deal? Stuff all. The conservative US International Trade Organisation has calculated that the original TPP would have only generated 128,000 additional jobs by 2032 – in a context where in any given year, four million Americans lose their jobs involuntarily. Yes, trade is important. But the fact is, Australia’s trade with China increased hugely in the decade before it finally signed an FTA with China in 2015. Our trade with China would have increased similarly, whether we signed an FTA or not.

Finally, to raise in public the concerns about the provisions on the table in trade talks is not to be anti-trade – it is about ensuring that we negotiate, and not capitulate. It is about defending the national interest. Here’s a good example. To date, most of the heated concerns about free trade have been about the mechanisms for dispute resolution, and whether New Zealand has willingly surrendered too much power to unelected dispute tribunals whose members are prone to capture by the multinationals who employ them, in other contexts.

That’s a sensible concern. The European Union recognises it. That’s why its Trade Commissioner Cecilia Malmstrom has urged the adoption of a new arbitration system that contains many of the natural justice protections of an ordinary court of law. If we are keen (as Todd McClay says we are) to do an FTA with the EU, we will presumably have to adopt this new system – which the EU has included in its recent FTA deals with Canada and Vietnam.

Yet there’s the rub. When Japan and the EU worked out their FTA a few months ago, they set aside the question of dispute resolution because they couldn’t agree on how it should be done. Meanwhile Japan, New Zealand and the rest of the TPP club are trying to wrap up their “TPP without the US” deal – even though it still contains the old, outmoded, and socially polarising system of dispute resolution. Remember how the TPP was supposed to be a top shelf, 21st century deal? On dispute resolution, it plainly isn’t.

That’s the real question for McClay. Why are you pursuing the old flawed tribunal system with the other TPP nations when – presumably – you are going to be embracing the new arbitration system when you sit down to negotiate with Malmstrom at the European Union? If the business lobbies were doing anything other than genuflecting at the altar of free trade, they’d be querying McClay about that blatant contradiction.

Not so silly love songs

Lana Del Rey’s “Love” has been one of the year’s best ballads. Hot on its heels comes Syd – the lead singer of the band The Internet – with a new single about when a hookup starts to develop into something more lasting, and the fears that commitment brings in its wake. So here’s the Del Rey track one more time:

And here’s Syd’s “Bad Dream/No Looking Back”…