Documents from Treasury released under the Official Information Act showed the government’s financial advisers viewed the project — which was initially budgeted at about $380 million — in a dim light, particularly in the present constrained fiscal environment.
It comes as the government is expected to make an announcement on the project next week.
The concerns were raised by Treasury throughout last year, beginning with the 2024 Budget talks, where it said there were "several risks" with the proposal.
The proposed third medical school has proved controversial with the University of Auckland and University of Otago, who both provide New Zealand’s existing medical training. Both argue they can train more doctors more efficiently and effectively than establishing a new medical school.
Treasury’s concern grew as the government pushed ahead.
The initial timeframe had work on the medical school starting next year with its first cohort in 2027 or 2028.
"The timeline remains ambitious, and any further compression of the timeframe may result in poor or incomplete information provided as part of the business case process, or impact on necessary timeframes to complete other key processes."
It also questioned the $380m figure, and Waikato University’s ability to raise the $100m required to get the project over the line.
In response to an August 2024 Cabinet paper proposing to push ahead with the cost-benefit analysis of the medical school, Treasury raised several red flags.
"The project timeframe is shorter than is standard for projects of this type and complexity.
"Where previous decisions on health infrastructure builds have been rushed (e.g. new Dunedin hospital), we continue to see unexpected and often urgent cost escalations, impacting investment in the broader health system."
In August last year, Treasury shared the concerns of the existing medical schools — saying there were other ways to achieve the government’s goal of increasing the number of rural GPs, such as alternative models of care, greater use of other workforces such as nurse practitioners, or exploring greater use of digital and ancillary services.
"However, the cost-benefit-analysis has been constrained to medical education intervention options, which we consider ultimately weights analysis towards favouring the new medical school as the preferred option."
It summed up the proposed medical school as "‘unaffordable in the current fiscal climate with significant operating and capital funding demands".
"We do not think the proposal is likely to deliver value for money."
Green MP Francisco Hernandez said the cost benefit analysis "exaggerated the benefits of the Waikato medical school, while not even considering most cost-effective proposals put forward by Auckland and Otago".
"The best time to scrap this project was at the drawing board, but there’s still time for the coalition government to make the right decision to put public good ahead of private gain.
"Communities across Aotearoa deserve a well-resourced and thriving public health sector, and the best way to deliver this is by investing in real solutions to our health workforce shortage — like expanding placements at Auckland and Otago."
Health Minister Simeon Brown said in the coalition agreement between the Act New Zealand and National parties, the government committed to a full cost benefit analysis before any agreement was made with respect to the Waikato medical school.
"The Waikato medical school is under active consideration by the government."
