In a significant move to address ongoing financial difficulties, Health Minister Dr Shane Reti announced today the appointment of Professor Lester Levy as Commissioner of Health New Zealand.

This decision comes in response to serious concerns over oversight, overspending, and a deteriorating financial outlook at Health NZ.

Dr Reti revealed that Health NZ’s financial situation had worsened significantly since March 2024.

Despite assurances that savings would be achieved in the 2023/24 financial year, the organisation is currently overspending at a rate of approximately $130 million per month.

The situation is expected to lead to an estimated deficit of $1.4 billion by the end of the 2024/25 financial year.

"The previous government's health reforms created significant challenges that require urgent action," Dr Reti said.

"Professor Levy will implement a turnaround plan with a goal of saving around $1.4 billion and strengthening governance and management."

The reforms, which led to an overly centralised operating model and fragmented administrative systems, have been criticised for their impact on financial performance and oversight.

The Commissioner will focus on reducing back-office bureaucracy and improving cost efficiencies, particularly in middle management, which saw a significant increase in staffing levels under the previous government.

Dr Reti emphasised that the appointment is not a reflection on the work of frontline staff.

The Ministry of Health will continue to monitor the situation and report on the Commissioner’s progress.