That was the message from chairman Errol Millar at the board's last meeting this week. He said the board would have to fund the 2% increase next year for the workers covered by the Public Service Association, the New Zealand Nurses Organisation and the Service and Food Workers Union in the agreement, but this money would be coming out of existing operations.
He predicted tension between the board and community services it funded because there would be an expectation the board would extend the increase.
"We haven't got the dosh to be able to do that. We are not funded for it."
Board member Louise Carr said she was concerned this situation meant the setting up of two tiers in the health and disability sector, where money could be found for those employed in board services, but not those outside.
Chief executive Brian Rousseau said the board would not be able to add the $1.5 million to the deficit and would have to find that amount from within budgets.
It did not necessarily mean cuts in services, but would require the board to change the way it did things.
During discussion of the board's financial situation, business analyst Grant Paris said under the agreement there would be a nine-month lag from the time the relevant multi-employer contracts expired and the 2% pay rise.
He agreed this meant the board would not be paying out any extra this financial year.
It had budgeted for a 2% increase.
Pay agreements have not yet been reached by district health boards with senior and junior doctors and medical radiation technologists.
In light of the recent settlement, boards may also come under pressure in the coming year from those on individual contracts who have agreed to no pay increase this year.
Financial reports to the end of February show the board was over budget in personnel costs by $34,000.
Staff costs account for $199 million of the board's $539 million budget.
The cost of nursing salaries, because of increased numbers, and the cost of covering vacancies in some allied health jobs are listed as factors likely to have an unfavourable impact on the end-of-year result.
At this stage the board is still expecting to end the year with a deficit of $9 million. This is $2 million higher than the budget.
Spending on home support costs for the elderly, which is expected to be $2.5 million higher than budgeted by the end of the year; $600,000 worth of dental claims through the adolescent and low-income dental services; and $300,000 in patient travel costs through the National Travel Assistance scheme are also expected to contribute to the deficit.
While district health boards' funding for the next financial year is yet to be announced, Health Minister Tony Ryall has stressed extra funding for boards would be much lower than this financial year.
It is understood the Otago and Southland boards, which are already struggling to rein in deficits which could total nearly $20 million by the end of the year, may get about $10 million less in extra funding compared with this year.
