Total health expenditure in New Zealand - Data and Analysis (1970-2034)

Total health expenditure is forecast to rise by 3.0% in 2026-27, to $48.4 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. Under Budget 2026, the government has announced a $5.8 billion package for Vote Health operations, including a $1.37 billion annual rise to meet mounting cost pressures. The Budget also includes significant investment into the nation's health system, amounting to over $680 million in capital funding through measures like a 158-bed ward tower at Whangarei Hospital, under Stage 2 of the Project Pihi Kaha at the Hospital, as well as redevelopments at Tauranga, Hawke's Bay and Palmerston North regional hospitals as a part of Tranche 2 of the Regional Hospital Redevelopment program.Total health expenditure has escalated over the past five years. A sudden spike in funding through 2021-22 was driven by health responses to 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. Demand for health services has naturally increased over the past five years, principally in response to New Zealand's ageing population, as people aged 65 and over are more prone to chronic disease and illness, requiring more medical care. Also, New Zealanders who want specialty services or shorter wait times are opting to pay more for 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 increased funding to Pharmac, up by $54 million over four years, as well as boosting investment in ambulance road services by $35 million. As a result, IBISWorld forecasts total health expenditure to grow at a compound annual rate of 3.1% over the five years through 2026-27.