Saturday, March 18, 2006

John Armstrong: Hodgson has big shoes to fill

The managers of the country's 21 district health boards would have had something of a double take when they read the letter they got from their new minister just before Christmas.

At first glance the letter, which listed his priorities for the public health sector, was typical of Pete Hodgson's slightly idiosyncratic manner, which has him being very polite, almost deferential to the person he is addressing.

He talked of filling "big shoes" - a reference to Annette King who held the health portfolio for the previous six years, a remarkable tenure in one of the Cabinet's most demanding and thankless jobs.

He urged the DHBs to "please continue to do well what you already do well". He made big mention of "relationships", saying these were "rich and important" and that they built trust and were "self-evidently valuable".

Then came the sting. "Financial transparency and a sensible 'no surprises' policy are two good examples, and they bind all of us, me included."

What Hodgson was really saying was "I expect you to be straight with me. I don't want to find out about your problems through the news media".

By the time they had translated the rest of the letter, the managers would have got the message. The Government no longer had "expectations" that deficit-prone DHBs will show fiscal rigour. The new minister considered that simply to be a given - a point rammed home by him setting "cost-effectiveness" as one of his priorities.

Hodgson seemed to have adopted the old Theodore Roosevelt maxim: Speak softly and carry a big stick. Or, in his case, at least sound as if he is carrying one.

Publicly, Hodgson has been emphasising "different minister, same policies". He has deliberately held back putting his own stamp on the portfolio by means of a major policy speech until he feels the time is right.

That point is not far off. As he says in the letter, a new minister inevitably means a change in style. That is not the only thing changing in health.

Hodgson has taken over the portfolio at a critical juncture.

Having poured money into the health sector like confetti, Labour now needs bangs for its bucks.

Mounting fiscal pressures combined with Michael Cullen's warning that recent increases in the health budget cannot be sustained have forced ministers to undertake various expenditure reviews, to control ever-escalating costs in the short-term and confront the major one in the long-term - New Zealand's ageing population.

Two months away from the Budget, Hodgson will say only that next year's increase for health will be between 5 and 10 per cent. It is enough to say the sector will not get as much extra cash as it has been getting, but neither is Labour slamming on the brakes.

However, in a sector where demand for ever more expensive treatments is insatiable, the slow squeeze will still induce pain - especially as DHBs face wage pressures driven by staff shortages and last year's generous nurses' settlement.

King's success in the portfolio is put down to her emphasis on building relationships and trust - echoed by Hodgson in his letter to DHBs.

That plus having the money to oil wheels that did squeak kept the lid on trouble - and health off the political agenda.

But that is also changing.

So far, the fight is only a skirmish - as evidenced this week when National confronted Hodgson with figures suggesting there had been no increase in hospital operations over the past five years despite Labour spending more on non-urgent elective surgery.

But slowly and methodically, National is opening a sustained offensive on a front it has long neglected.

National felt for a long time that it was best not to make too much fuss about health and give voters time to forget its cuts in real spending during the 1990s and the failed experiment with market-based solutions.

Before the election, the shadow health portfolio was held by Paul Hutchison, who was ranked No 23 in a caucus of 27.

National did not bother releasing its health policy until halfway through the election campaign.

But post-election, Don Brash and his advisers determined that National had to broaden its overall attack on Labour.

National also detected the public was starting to question whether Labour's reforms had made any difference when it comes to the bottom-line of getting treatment in a reasonable period of time.

The health portfolio went back on the frontbench and into the hands of the increasingly influential Tony Ryall, thirsting for the challenge of a large portfolio.

His 15 years-plus experience as an MP and a former minister shows. In grasping the complexities of health, you can lose touch with your wider audience.

An Opposition MP can hit the target only for everyone else to miss the point.

Instead of applying a hit-anything, blunderbuss-type approach, Ryall has both narrowed and sharpened National's attack.

National is now asking the $4 billion question: where did all of Labour's extra money go?

The most politically sensitive measure of that is the number of elective surgical procedures carried out each year in public hospitals. Ryall is out to "debunk the myth" that those have increased significantly under Labour and waiting times have correspondingly been slashed.

The data is plentiful - and varied enough to support and demolish claim and counter-claim.

But lacking the numbers of those getting surgical procedures as out-patients, Hodgson struggled to be convincing in Parliament this week as he and Ryall traded statistics on in-patient discharges from hospitals.

Hodgson was also caught out late last year when Ryall flourished a document which Hodgson had not seen listing those who would be eligible for doses of Tamiflu in the event of a bird-flu epidemic.

These are the hiccups of a minister handling a new portfolio rather than someone drowning in one they have held for years.

Nevertheless, Hodgson's remark that the public health system scores 5 1/2 out of 10 for performance is not one King would have uttered.

When it came to winning over those inside and outside the sector, she possessed the persuasive combination of being seen as tough-minded yet warm-hearted.

Hodgson comes across as more cold-blooded - somewhat academic, somewhat detached and somewhat prickly. But this demeanour hides canny political instincts which have made him one of Labour's shrewdest tacticians.

In some respects, Hodgson has been under- used as a Cabinet minister, sometimes being given a string of lesser portfolios rather than a single major one.

Despite slip-ups in the energy portfolio, he still has to be regarded as a safe pair of hands.

He is more than qualified to fill King's shoes. But clearly he intends being his own man.

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