t h e n ew no rma l
| 2 01 2
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Clearly partnerships are a challenging
feature of the New Zealand business
landscape. To overcome New Zealand’s
geographical isolation, and become
globally competitive, organisations are
increasingly attempting to offshore or
outsource operations, but the survey
feedback suggests that domestic
arrangements are tricky enough,
let alone those that are global.
Chief Executives also noted difficulties
with the processes and funding models
underpinning these contracts.
The funding models fail to cover even
basic costs, let alone the increasing
complexity of public needs. A drive to
get “more for less”, on the government’s
part, was noted. Funding strategies are
determined by government departments
without consultation with or notice to
providers, the focus on cost reduction
being “unrealistic” and “akin to squeezing
a dry sponge in the hope of a flow of
water”. There are disparities between
funding levels for district health boards
and other health providers – “but the
expectations and risks are higher –
eg. when hospitals don’t perform there
is no clawback or termination of
contract”. On the Public sector’s part,
the view is that the financial viability
of client organisations indeed poses a
major challenge.
75%
of our income comes from three main government
contracts and while, in theory, we have three-year
agreements (high trust contracts), there has already been
one where the 60-day termination clause has been used.
We could have 25% of our income cancelled with as little as
60
days’ notice, and that eventuality is looking increasingly
likely. The impact on our organisation will be huge – our
sustainability will be under threat.
CEO
| Healthcare, Medical & Social Services Organisation
key findings //
6:
partnerships with other organisations cont. . .