E tū is calling on the Government to use Thursday’s Budget to direct a $400m health underspend back into community and residential support services, rather than banking the money while care workers struggle on poverty wages.
The Treasury’s latest interim financial statements, covering the nine months to 31 March 2026, show health expenses came in $400m below forecast. The shortfall sits mainly in payments for community and residential-based support services, the parts of the system that rely on home support workers, residential aged care workers, and disability support workers to keep running.
Thursday’s Budget will reveal whether that money flows back into the sector that needed it, or whether the Government banks the savings to flatter the books.
The underspend lands on top of last year’s Budget decision to gut pay equity, which extinguished 33 active claims and stripped nearly $13 billion from the future wages of women working in care and community services.
E tū home support worker Tamara Baddeley says the underspend is consistent with the poor approach our Government has taken for care and support.
“It’s very frustrating, but not surprising, that the sector is not even getting all the money we are supposed to get,” Tamara says.
“The Government is hell-bent on debt reduction to make them look good, but it’s just going to exacerbate the issues in the future.
“When they stripped away pay equity last year, they forgot one very important thing – the money we spend in the local economy is vital and a lot of it even gets back to the Government through our taxes and GST.”
E tū Director Amy Hansen says the Budget will show where the Government’s priorities really lie.
“This $400m is money that was meant to support some of the most undervalued workers in the country. People who care for elderly New Zealanders, who support disabled people, who hold our community services together,” Amy says.
“For a decade, workers and providers have been carrying growing client needs on inadequate funding. The workforce has absorbed that pressure on top of low pay and tough conditions. Te Whatu Ora cannot now turn around and frame this underspend as a story about provider efficiency. Most providers are running on the smell of an oily rag, and the workforce is paying the price.
“After tearing $13 billion out of pay equity last year, and underinvesting in home and community support services for three years, the Government cannot now quietly pocket an underspend that was earmarked for the very same workers. That would be a betrayal on top of a betrayal. People are leaving the sector because they cannot afford to stay, and reinvesting this money is the absolute least the Government can do.
“On Thursday the Government has a choice. They can put this money back into the workforce that delivers care every day, or they can use it to dress up the books while care workers go to food banks. If they choose the second option, every care worker in the country will know exactly where they stand.”