Prime Minister Christopher Luxon says heads could roll in Health NZ’s executive team as he believes they share the blame for what the Government deems poor financial control within the public health system.

Health NZ’s board has been replaced by a sole commissioner, Lester Levy, but Luxon says changes to the executive are “on the table” and are in Levy’s hands.

His comments follow Finance Minister Nicola Willis releasing a letter she penned to Health Minister Dr Shane Reti in March, which detailed her concern about excessive spending and poor financial management within Health NZ.

It’s advanced the Government’s criticism of the entity and its board after Luxon and Reti said last week Health NZ was overspending by about $130 million a month and on track for a $1.4b deficit by the end of the year.

The Government blames the previous Labour Government’s ability to merge the more than 20 district health boards into one entity, but Labour’s former health minister instead points to an alleged underspend by the Government in health.

Earlier this month, the Herald reported two of Health NZ’s board had resigned before their term had concluded. Three others hadn’t put themselves up for another term, leaving just two remaining on the seven-person board.

It was later announced Levy, who had been the board chairman, would act as commissioner in place of a board.

Luxon, speaking at his post-Cabinet press conference and lauding his tax cuts coming into force on Wednesday, confronted whether the board or the senior leadership team was responsible for the financial management of Health NZ.

He said both were culpable. Luxon refrained from stating whether heads should roll within the executive - led by chief executive Margie Apa - but described it as a possible option for Levy.

“Everything’s on the table because I want a high-performing organisation, I’m not prepared to spend $30b of taxpayers’ money .... and tip it into an organisation that’s not going to deliver improved outcomes for New Zealanders.

“I’ve changed the bit that I can change, I’ve stepped it up from just replacing a chair and a board to actually putting a commissioner in with some deputy commissioners and they have the power and the ability to be incredibly nimble, incredibly agile to fix things fast.”

Health NZ commissioner Professor Lester Levy will determine whether heads should roll. Photo / Dean Purcell

He claimed Health NZ’s board lacked financial control and there was “no great understanding or literacy around cash flow analysis whatsoever”.

Willis, appearing with Luxon, read from a letter she sent to Reti earlier this year in which she had stated advice from Treasury officials that Health NZ had risked an “operating deficit of around $150m less than the Ministry [of Health’s] expectation for 2023/24″, before she later became aware of the greater deficit revealed last week.

“We had a situation where the board wasn’t getting accurate financial information, the minister wasn’t getting accurate financial information and only by our officials pushing very, very hard, did the full picture emerge.

“Treasury officials met with the board of Health NZ on 23 February, 2024 and report the board did not seem across the detail of this issue.

“It’s my view that the board didn’t even know what questions to ask to get the information that New Zealanders had a right to have.”

Labour’s health spokeswoman Dr Ayesha Verrall today called for the Government to release Health NZ’s monthly financial reporting, given a quarterly performance report in March suggested the entity had achieved a $196 million operating surplus, which was “$220 million favourable to budget”.

Labour leader Chris Hipkins noted Willis’ comment Reti hadn’t received regular updates and said he should take responsibility.

“If the minister of health in my government had not been receiving or asking for financial reports for the last eight months, that would be a relatively major issue of competence of the minister of health,” he said.

“The question really is whether the right heads are rolling.”

Adam Pearse is a political reporter in the NZ Herald Press Gallery team, based at Parliament. He has worked for NZME since 2018, covering sport and health for the Northern Advocate in Whangārei before moving to the NZ Herald in Auckland, covering Covid-19 and crime.