ACT has put a number on the medicines argument it has been having inside government for three years. The party announced on Sunday that if it is in the next government it will push for the share of the health budget spent on medicines to rise by one percentage point every year until New Zealand reaches the level Australia spends today, which on ACT’s timetable happens in 2033.
The starting point is low. A 2025 report by the New Zealand Institute of Economic Research put total pharmaceutical spending here at 4.9 percent of health expenditure, the smallest share of the 13 countries it compared. Australia spends 12.2 percent. The OECD average is 13.3 percent. ACT’s plan would lift New Zealand to about 12 percent by 2033.
ACT leader David Seymour, who holds ministerial responsibility for Pharmac, framed the gap as a problem with how the agency is treated rather than how it works. “Pharmac is punished for being tougher on its costs than anyone else in the healthcare system. We need to give them a break,” he told RNZ.
That is a pointed observation about the way the agency is funded. Pharmac negotiates hard, buys generics where it can and refuses to pay list price, and the reward for driving the bill down is a budget line that stays small. Seymour said he had tried and failed to move it from inside. “I have asked for more modest increases in medicines funding, which have been rejected,” he said. He described the new policy as “an achievable, realistic, and timely way to approach a problem that everyone admits, but no one has ever quite got on top of”, and as “a final jigsaw piece in the work that I’ve done over the last three years”.
The numbers behind the policy are large but back loaded. On ACT’s projections, medicines spending in the 2027/28 year would sit between $2 billion and $2.2 billion out of a health budget of $33.4 billion to $36.6 billion, an increase of roughly $200 million to $400 million on where it would otherwise be. By 2033/34 the health budget is projected at $44.9 billion to $51 billion and medicines spending at $5.4 billion to $6.1 billion. The heavy lifting happens in the second half of the decade, under governments nobody has voted for yet.
Seymour acknowledged that directly. “The logic that I’m producing now, I believe, is unassailable as a way of persuading anyone who’s in government, and let’s be really honest, between now and 2033 there’ll probably be several different people in government, this is a logic that anyone can sign up to,” he said.
ACT health spokesperson Todd Stephenson put the gap in terms of specific treatments. “Australia funds 142 modern medicines that are not funded in New Zealand, and 38 per cent of those are cancer medicines,” he said in the party’s announcement. Seymour said no New Zealander “should have to empty their savings, uproot their family, or leave the country to get medicines Australians receive as a matter of course”, and said that as the minister responsible, “my hands are tied because Pharmac just doesn’t have the money”.
The obvious question is where the money comes from, and ACT’s answer is that it comes from inside health. “This is a gradual shift in the makeup of a growing health budget. It will not require additional taxes,” Stephenson said. That is the honest description of the trade off. A percentage point moved into medicines each year is a percentage point that does not go to hospitals, buildings, or the health workforce, unless the total budget grows fast enough to cover both. Whether that growth turns up is the part of the plan no party controls.
The immediate context is a Budget that disappointed patient groups. Budget 2026 delivered a health uplift of about $1.5 billion, of which Pharmac received $54 million spread over four years. The Breast Cancer Foundation said that amount did little more than hold the status quo. Pharmac’s list of treatments it would fund if it had the money runs to 139 applications, and the agency manages roughly $1.7 billion a year in total. The same frustration was on display in Auckland this weekend, where a patient-led installation called the Forbidden Pharmacy lined a shed at the waterfront with empty packets standing in for medicines that can be prescribed here but not paid for.
Reaction from the other parties was mild rather than hostile, which is unusual for an election year policy. Labour leader Chris Hipkins said “increasing funding for medicines, particularly where those medicines are focused on prevention, that’s a very good thing”. National’s health spokesperson Simeon Brown pointed to the current government’s record instead of engaging with the target, saying “National has delivered 66 new medicines since we were elected in 2023 and is committed to continuing to improve access to life-saving medicines”.
Neither ruled the idea out, which matters more than the words. A policy that only bites after 2029 needs successive governments to keep honouring it, and ACT’s pitch is essentially that the arithmetic is persuasive enough to survive changes of government. That is a real bet. Budget lines with no statutory protection tend to lose arguments to whatever is on fire in a given year, and the health system produces a fresh emergency most winters.
What ACT has done is turn a comparison everyone already accepted into a specific commitment with a date attached, which makes it something other parties can be asked about repeatedly between now and the election. If you want to see where the parties sit on this and other issues before you vote, our voting tool lays out the positions side by side.
Do you think medicines should get a fixed and rising share of the health budget, or should the money be argued for from scratch each year alongside everything else the system needs? Tell us what you think in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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