Total health expenditure

Total health expenditure is forecast to rise by 4.9% in 2025-26, to $51.0 billion. This increase reflects the ongoing need for funding as equipment and services become more expensive amid a growing and ageing population, despite the change in Government. In the Wellbeing Budget speech of May 2025, New Zealand Finance Minister Nicola Willis announced significant investment into the nation's health system, through measures like the Nelson Hospital redevelopment and the Wellington Regional Hospital emergency department. Overall, while funding remains strong, service needs are also rising, with cost pressures outpacing investment in many areas.

Total health expenditure has escalated over the past five years. A sudden spike in funding in 2020-21 was brought about by health responses to combat the outbreak of the pandemic. Despite this sugar hit, the healthcare sector is still experiencing staff shortages and long wait times, indicating demand for more long-term investment. The demand for health services has naturally grown over the past five years, principally due to New Zealand's ageing population, as people over the age of 65 are more prone to chronic disease and illness. New Zealanders that want specialty services or those that want shorter wait times are opting to pay more to engage in private health services. Private health insurance membership has inched upwards over the past five years, supporting total health expenditure. The government is also pitching in for elective surgeries, aiming for 21,000 more operations over the year on the back of their Elective Boost programme. As a result, IBISWorld forecasts total health expenditure to grow at a compound annual rate of 6.8% over the five years through 2025-26.