ACT Party leader David Seymour has put forward a contentious proposal aimed at overhauling New Zealand’s healthcare system.
During his State of the Nation address in Auckland on Friday, Seymour called for citizens to be able to leave the public healthcare system in favour of private insurance, with government funding following the individual.
A Radical Proposal
David Seymour is advocating for a shift in New Zealand’s healthcare system, proposing that government funds—approximately NZD6,000 per person—be redirected to individuals who choose private health insurance. He argued this would grant more choice and resolve inefficiencies in the public system.
During his address, Seymour challenged the audience with the question:
“How many people here would give up their right to the public healthcare system if they got NZD6,000 ($3426) for their own private insurance?”
He urged New Zealanders to move beyond any lingering “squeamishness” about privatisation. Reflecting his party’s long-standing stance on privatisation in other sectors like housing and education, Seymour also questioned the return on government-owned assets.
“We’ve got $570b worth of assets; are we getting a return on it? If something isn’t getting a return, maybe we should sell it and buy something else that will,” he suggested.
Criticism of the Proposal
The idea of privatising New Zealand’s healthcare system has drawn fierce criticism, with many fearing it could worsen existing disparities. Dr. Malcolm Mulholland, Chairman of Patient Voice Aotearoa, warned that the proposal would likely benefit wealthier citizens while leaving those in need of care behind.
“I don’t think it’s a solution to those in the middle-to-lower income bracket,” Mulholland said. He highlighted studies from other countries where private health insurance has led to worse health outcomes for poorer individuals.
Additionally, Mulholland expressed concern about the potential for profit-driven motives in healthcare, saying, “You’re participating in a system where profit is king,” which typically results in higher costs and less regulation.
Public Advocacy Pushback
The Public Service Association (PSA) has also criticised the proposal, calling it “extreme” and urging Prime Minister Christopher Luxon to reject any moves toward healthcare privatisation.
Acting National Secretary Fleur Fitzsimons stated, “These extreme policies have no place in New Zealand.” Green Party co-leader Chlöe Swarbrick echoed the sentiment, calling for clarity from Luxon on whether the government would consider such reforms.
Mulholland directly appealed to the Prime Minister, saying, “Rule out completely the prospect of privatising parts of the health system.”
Government’s Cautious Response
While Luxon refrained from outright rejecting the idea, he signalled a cautious approach. “What is on our agenda is actually how we accelerate economic growth, but it’s something that I’m open to discussing further, in the long term,” Luxon said, indicating that privatisation discussions might be deferred.
International Comparisons and Concerns
Seymour’s proposal has drawn comparisons to healthcare systems in countries like Germany, France, Switzerland, and the United States, where private insurance is a central component.
However, critics have highlighted significant concerns, particularly in the U.S., where high healthcare costs remain a substantial barrier for lower-income individuals.
Dr. Malcolm Mulholland emphasised these issues, noting that private insurance models tend to result in poorer health outcomes for disadvantaged groups.
“People with lower incomes tend to have both greater and multiple health needs,” he remarked.
The Challenge of Balancing Choice and Equity
Seymour has responded to critics, accusing them of jumping the gun without knowing the full scope of his proposal.
“I haven’t actually revealed any great details about what I’d propose, so for Patient Voice Aotearoa to start making these assumptions and criticisms without really knowing the full story, it’s exactly the sort of thinking that my speech was an attack on,” he said.
This ongoing debate raises a crucial question for New Zealand: can the nation achieve a balance between giving individuals more choice and ensuring equal healthcare access?