Promising the moon and then blaming gravity

The long, long history of promises made and promises broken on the new hospital in Dunedin.

Photo by Jair Lázaro on Unsplash

The Dunedin Hospital rebuild has become a complete political fiasco, with no party emerging unscathed. It’s been a drawn-out saga of broken promises, budget blowouts and political posturing, leaving the people of the lower South Island feeling like a horse yoked to a cart stuck in the mud.

A long unmet need

The hospital had long been in dire need of a serious upgrade. By the 2010s, the hospital’s infrastructure was visibly crumbling: outdated facilities, failing equipment and space limitations led to growing concern from healthcare professionals and the public. Staff reported frequent leaks, electrical issues and cramped wards.

Bit by bit, it became clear that piecemeal repairs would no longer suffice. A comprehensive rebuild or entirely new hospital was essential.

National’s cautious approach

Then-Health Minister Dr. Jonathan Coleman acknowledged the urgent need for a hospital overhaul but was wary of the potential costs, projecting a full rebuild at $1.2 to $1.4 billion. In 2017, the National government announced plans for a new hospital but, seeking to manage expenses, floated the idea of a public-private partnership to spread the financial burden.

This cautious approach reflected National’s focus on fiscal discipline but introduced uncertainty about how the project would move forward.

Labour throws caution into the wind

Labour was having none of it. Newly appointed leader Jacinda Ardern promised a fully government-funded rebuild – no evil private sector - arguing that Dunedin deserved a modern hospital free from corporate influence. Making the project a key election issue in 2017, Labour pledged a faster start and a more expansive plan.

Labour becomes more cautious in office

After Labour’s 2017 victory, the project fell to new Health Minister Dr. David Clark*, a Dunedin local. Despite Labour’s pledge to begin construction by 2020, the project soon stalled. Clark spent years refining plans, reviewing budgets and debating design elements, while projected costs crept higher and enthusiasm faded.

Before long, the stalling of the hospital project became emblematic of Labour’s broader challenges with other large infrastructure promises, such as Auckland’s light rail and Kiwibuild, which also became bogged down in endless rounds of consultation and planning. The gap between Labour's ambitious promises and their ability to deliver them widened significantly.

A new pair of hands

In 2020, Clark resigned amid unrelated controversies, leaving Andrew Little to inherit a project in crisis. As the new Health Minister, Little was focussed like a laser on the thing that matters to the Labour Party most of all: building the lanyardocracy. And so his tenure was primarily all about restructuring the healthcare system, consolidating the 20 District Health Boards into the centralised Te Whatu Ora.

This shift meant that projects like the hospital, once managed somewhat locally, would be transferred to the central bureaucracy.

All the while, concerns over escalating expenses loomed larger. The initial $1.4 billion estimate was left in the dust, and projections suggested costs might hit the $3 billion mark. By December 2022, Labour announced a scaled-back hospital design in a bid to manage the ballooning budget.

Little unveiled cuts to key components: reducing beds, cutting operating theatres and removing an MRI unit.

Verrall Inherits the Crisis

In February 2023, Dr Ayesha Verrall took over as Health Minister, bringing knowledge of the health sector but little political experience. She was immediately confronted with a project mired in delays, cost overruns and public discontent. Despite the cuts that had already been announced, costs continued to climb.

When the shoe was on the other foot

National seized the opportunity. In the leadup to 2023 election, the party pledged an additional $30 million to restore some of the cuts to the rebuild. In the context of the huge blowouts that had already happened, of course, this funding looked a bit modest. People were right to raise doubts over whether this would meaningfully enhance the hospital’s final scope.

The winds of change blow South

Nevertheless, National made much of their promise to bring the project closer to its original vision.

National’s victory in the 2023 election was underscored by significant swings in several South Island electorates. Taieri saw a swing to National of over 12 percentage points, while even Labour strongholds like Dunedin saw a major swing away from Labour.

Southland, Waitaki and Invercargill also experienced shifts towards National, ranging from 5 to 9 points. While it would be wrong to attribute National’s success solely to the hospital situation, the ongoing saga of the new hospital certainly didn’t help Labour's cause in the region.

A change of government but not direction

The Health Minister is now Dr Shane Reti, who must front the project alongside Infrastructure Minister Chris Bishop. They’ve just announced that, despite increased funding, the hospital rebuild still faces major challenges. A new report confirmed that the current plans cannot be delivered within the $1.88 billion budget.

The options on the table? Reducing floors, delaying fit-outs and keeping some services at the existing site—suggesting that, no matter who is in charge, the hospital rebuild remains mired in uncertainty.

So who deserves the blame?