Reti Shane; Little AndrewDr SHANE RETI (National): Thank you Madam Chair. In the Health Committee we explored as part of the Estimates health funding and Budget 2022 and indeed because it's a two-year appropriation we also looked further into Budget 2023. I have a range of questions both looking at this year's Budget and next year's Budget which I'll start with.First of all the $1.8 billion in this current year's Budget has around $520 million of consolidated debt—consolidated DHB deficit debt—which is now hard-baked pretty much for ever. I'm wondering if the Minister can speak to that: how we've come to the end of DHBs with just over $500 million of consolidated debt. The second question would be on pay equity. I believe that the Minister—it may be in the public domain or it could be from another important source—is saying that's a $520 million cost. I'm interested to know if he's able to share that what is the cost of the back-pay disagreement around pay equity that is currently in play. My third question is also a pay parity question. Is there any assessment of the pay parity for the aged residential care sector separately for primary care and then thirdly for the NGO or community nursing sector? Fourthly holiday pay: the remediation of the Holiday Act is reportedly a $1.4 billion appropriation. Has that funding been put aside? Is it taken into account in this year's Budget or next year's Budget? What is the time for that? Is there any funding that's been put aside to date for that very large cost which will come to bear?I then want to go on to the $1.3 billion tagged contingency for next year. That's an awful lot of money unallocated for a tagged contingency and coming into election year it will raise the question as to whether that's just a slush fund. Can the Minister comment as to what that $1.3 billion tagged contingency will be used for and furthermore the tagged contingency this year which is about $500 million—has that been drawn down already? What is it envisaged that that is used for? I think there's a range of questions. I don't want to lay them all out because I know the Minister wants to talk to them. So hopefully I can come back to the second set that I have but I lay those on the table for now.Hon ANDREW LITTLE (Minister of Health): Thank you Madam Chair. I thank the member for his questions. I'll see if I can get through all of them. I might just seek a point of clarification but anyway. I know the member acknowledges that this is effectively a two-year Budget for health and the underlying principle there is we wanted to start to give some longer-term certainty to the sector not only to the two new entities Te Whatu Ora Health New Zealand and Te Aka Whai Ora—the Māori Health Authority—but actually to the many organisations that they fund through the various funding contracts. As I say that gives certainty to the sector.The member quite correctly points out that there is a $520 million contingency which I think the member described as a consolidated debt. It is to reflect the expectation of the financial performance outcome of the DHBs in their final financial year so the year ending 30 June 2022. But the reason it's a tagged contingency is we don't quite know where that is going to come out once the full financial wash is played out. We're expecting those results fairly soon. But that is what it is there for. It was a projection of the deficit for the financial year ending 30 June 2022 based on previous financial performance in both previous financial years and the way the financial year ending 30 June 2022 had progressed since 1 July 2021.On the issue of pay equity the member notes my statement about a $520 million annual additional cost to payroll and that is correct. That's what I've said and that is the figure—that's the advice I've received. That's held in a tagged contingency for State sector pay equity so that is held separately. The member asked for the cost of back-pay. The estimates I've received for that are anywhere between $660 million and $1 billion. I think part of the thing that we're conscious of is that if there has to be a two-year back-pay for nurses then it's likely that other parts of both the health sector and possibly parts of the State sector—but certainly the health sector—will be wanting to seek that. I can report to the committee that in relation to the midwives' pay equity claim there have been substantial negotiations and they've pretty much reached the point where the last remaining aspect of that is a lump sum payment and the midwives have made it clear that they wish to hold off until they see what happens with whether or not the registered nurses will get their two-year back-pay claim. So whatever that figure is there will be a precedent effect that will almost certainly influence other claims. So that is significant that is real and that is why we do take seriously the action that the New Zealand Nurses Organisation is taking. I am confident on the basis of the advice I've received that there is no agreement on two years' back-pay and that is why it is important for what was then the DHBs now Te Whatu Ora Health New Zealand to defend themselves against that claim. Hopefully—it would be my strong hope—the parties are able at some point to resolve it without the litigation running its full course but that is in the hands of the parties together. It's not something that one party or the other can determine.In relation to pay parity I think the member asked separately for the cost in relation to aged residential care primary care and the NGO sector. I don't have them separated out. What I do have on the basis of the best information that we've received is a cost for all of those sectors of between $200 million and $300 million but I haven't got those separated out.In relation to the Holidays Act remediation the member points out the $1.4 billion which is effectively a tagged contingency. I can report to the House that considerable work has been done on that. That money is available. It won't come out of Te Whatu Ora Health New Zealand's baseline. It has been put aside separately again as I say as a tagged contingency. That work is still continuing. It's a strong hope of all of us I think that it can draw to a conclusion if not by the end of this year then certainly early next year.Finally in relation to the member's reference to a $1.3 billion tagged contingency I have to confess I'm not quite sure what that relates to—yes I do. I'm very thankful to Margie Apa the chief executive of Te Whatu Ora Health New Zealand who just advised me that that relates to the cost pressure for 2023-24 and that is reflected as a tagged contingency because we won't know more precisely what to estimate for that until next year.