Prime Minister Christopher Luxon says the government will not budge on the budget cap it has set of $1.9 billion for the new Dunedin hospital.
Speaking to the Otago Daily Times in Queenstown yesterday, Mr Luxon used the figure $1.9b for the hospital build budget — and when asked if the government would spend any more on the project, he said "no".
"No, we have to manage within our means," Mr Luxon said.
"We inherited a situation economically where the previous Labour government had increased spending by 84% — they borrowed more, they taxed more, they ran our economy into a recession, and as a result we've got rising levels of unemployment.
"We have to put fiscal and financial discipline back into place, just like New Zealand families have been doing over the last few years, just like New Zealand businesses have been doing.
"And we're just asking the same thing from the government.
"You cannot have a project go from $1.2b to $3b, and a series of increases.
"We've put more money in, but we're going to deliver a hospital at $1.9b."
Infrastructure Minister Chris Bishop and Health Minister Dr Shane Reti sent ripples through the South in September when they came to Dunedin and said the hospital construction under way in the city centre would not proceed as planned.
The cost of the project would approach $3b and upgrades to other regional hospitals would be at risk if the budget blowout was not addressed, they said.
To that end, the government was seeking urgent advice on two options for the project that would keep it within the budget cap, they said.
The first option was to scale back what would be built within the existing building envelope under development.
The second option was a staged development on the old hospital site, including a new clinical services building and refurbishing the existing ward tower, they said.
Work has since stopped at the city centre construction site as Health New Zealand-Te Whatu Ora staff put together options for consideration by Cabinet.
However, both of the options prepared have been seen by Dunedin clinicians, who have now said they both "fell far short" of what was originally planned.
The second option, re-using the old hospital, needed to be immediately discounted as unworkable, senior clinician Dr Sheila Barnett told a crowd of about 1000 people at a rally in the Dunedin Town Hall last week.
Mr Luxon said he accepted delays were costly, but said the previous Labour government "did absolutely nothing for the people of Dunedin".
"The bottom line is, ‘What the hell was the last government doing for six years?’
"This is our government, and within 12 months we've identified a problem that was well-framed to the previous Labour administration."
There had been a number of what were called "gateway reviews", in which the Dunedin Hospital was identified as a red project or an amber project, he said.
"It should have been dealt with at the time. It wasn't.
"We're going to build a great hospital for Dunedin at $1.9b, but not at $3b."
While in Queenstown, Mr Luxon spoke to members of the English cricket team playing a warmup game at Sir John Davies Oval against the New Zealand XI, renamed the Prime Minister’s XI for the occasion.
Mr Luxon also visited several local businesses including Cookie Time, Rugby Planet, Romer Gallery and had some food at Erik’s Fish and Chips and made a mocktail at the restaurant Soda.
— Philip Chandler and Hamish MacLean
