What is the effect of the $300 million equity withdrawal for the Health Digital Investment Plan on Health New Zealand’s balance sheet, cash position and capital headroom?

Answer

I am advised that the effect of the withdrawal of equity of $300 million from Health New Zealand on the 2025/26 balance sheet is a reduction in Crown equity and cash reserves. The equity withdrawal swaps funding from Capital to operational funding, thus transferring $300 million to fund operational costs for the Health Digital Investment Plan. I am further advised that the $300m operational funding will be drawn down at $100 million per year from 2026/27 to 2028/29. I am also advised that the equity withdrawal is funded by Health NZ cash reserves generated from capital expenditure not incurred over the years since Health NZ inception. This enables better alignment of funding for the Digital Investment Programme with the operational nature of costs (e.g. as-a-service platforms and systems) that will be incurred across investment projects.