02.02.01. How is the health system financed? | New Zealand

02.02.01. How is the health system financed? | New Zealand

14 Sep 2022

Public funding

New Zealand’s health and disability system is mainly funded from general taxation. The health system’s funding comes mainly from Vote Health, which totalled just over $20 billion in the 2020 budget. Other significant funding sources include the Accident Compensation Corporation (ACC), other government agencies, local government, and private sources such as insurance and out-of-pocket payments. The Ministry of Health allocates more than three-quarters of the public funds and it manages through Vote Health to DHBs, which use this funding to plan, purchase and provide health services, including public hospitals and most public health services, within their areas.

Most of the remaining public funding provided to the Ministry (approximately 19 percent) is used to fund important national services, such as disability support services, public health services, specific screening programmes, mental health services, elective services, Well Child and primary maternity services, Māori health services and postgraduate clinical education and training. About 1 percent of Vote Health funding is spent on running the Ministry, which supports, oversees, governs, and develops the wider health and disability sector (Ministry of Health, 2016).

Private funding

As outlined previously, private health insurance and household out of pocket expenses account for ~20% of the total healthcare spend for New Zealand with ~80% of private health insurance costs covered by the individual or their family member.


Ministry of Health. (2016). Funding. Ministry of Health website. Available from: https://www.health.govt.nz/new-zealand-health-system/overview-health-system/funding.