Media release from Peter Dunne,Minister of Revenue, Associate Minister of Health

Address to Fronde Cloud Computing Seminar
Westpac Stadium, Wellington 8.15am, Wednesday, 30 June

Good morning.

I am delighted to be here to talk to you on some real challenges for both the public and private sectors.

We operate today in an environment of greater fiscal prudence than we have experienced for a long time, so the issues that you are going to study at this seminar are important ones.

We are constantly trying to do things better, with less cost and greater efficiency.

My contribution to your day is to talk about the IT developments that are about doing things better, more cost effectively and with greater efficiency in my two areas of Ministerial responsibility - Health and Revenue.

Let me begin with Health.

Problems of the past

We all know that the New Zealand health system cannot afford the uncontrolled growth of health care costs, nor duplication or poor decision-making.

To prevent these things happening, the Government is focusing on policies to improve performance and sustainability, reduce bureaucracy and improve frontline health resources.

One of the weaknesses of the current devolved health system is that it has been allowed to develop around the needs of provider organisations, and not around the needs of patients.

So collaboration between different health care providers is essential if we are to create a person-centred health care system.

A person-centred health care system will allow information to flow seamlessly between health care providers as a patient moves around the health system, along a variety of different clinical pathways.

In the past there has been too much fragmentation between health care service delivery and the managers of capital investment, workforce planning and health IT solutions.

Better collaboration between these groups, and with health IT vendors, will be essential if we are to build a world-class health system.

Leadership - the National Health Board and the National Health IT Board

But collaboration is no good without a common goal - a clear vision - and strong leadership.

Therefore, the first significant step made by the new Government was to establish a new National Health Board and associated business unit within the Ministry.

The role of the National Health Board and the dedicated business unit is to:

 co-ordinate the planning, funding and monitoring of district health boards

 co-ordinate the planning and funding of national services

 arbitrate in regional service disputes

 undertake national capacity planning and funding for workforce, information technology and capital.

A National Health IT Board, reporting to the National Health Board, has been established to provide much-needed stronger direction and leadership in health IT.

National Health IT Plan

New Zealand has had previous health information strategies that have gained support and international recognition, but implementation has been problematic and has fallen short of expectations.

The new National Health IT Plan - currently in the final stages of development - recognises the critical role clinicians play in leading the development of integrated clinical pathways to improve the design and operation of health IT solutions.

The plan also recognises the need to use information more effectively to enable new models of care, improve patient safety and deliver productivity improvements.

The vision for the National Health IT Plan is to achieve high quality healthcare and improve patient safety.

The aim is that by 2014 New Zealanders will have a core set of personal health information available electronically to them and their treatment providers, regardless of the setting, as they access health services.


Building foundations for sharing health information


Phase 1 of the Plan is focused on consolidating, co-operating and building a foundation for sharing health information.

This allows continuum of care, which includes e-referrals, transfer of care, safer medication management and improving primary care systems.

To allow information to be appropriately shared between 20 district health boards, hospital-based clinicians, general practitioners and hundreds of health care organisations, their information systems and networks need to be interoperable.

There needs to be community understanding and support for the sharing of health information, which requires engagement and collaboration with consumers.

There are already some programmes under way within the Ministry of Health and the health sector to establish this foundation for the safe sharing of health information.

Nationally agreed standards are being developed so that one computer system will be able to talk to another.

At the moment this does not happen.

The Ministry's Connected Health Programme and the Health Information Standards Organisation are developing standards for health information and IT systems.

If all health practitioners can start to use IT products and services that comply with these national standards, they will be able to securely exchange information, no matter, for example, which telecommunications network they are on or which patient management software application they use.


Data transfer initiatives - GP2GP, e-Referrals and e-Discharges

Even among GPs there are many different patient management software applications that are not able to automatically transfer information between each other.

This wastes time and potentially puts patients at risk.

There is an initiative, GP2GP, which started out as Ministry project but is now rightly being managed by GPs themselves, from GPNZ.

The project will deliver the capability to transfer patient notes, electronically, from one general practice to another.

The standards being developed by the GP2GP project will establish a foundation for other electronic data transfers between health providers, for example, maternity notes transfer and e-referrals.

There is an e-referrals project being run in Auckland that will give 600 GPs across the region access to 25 standard forms via their patient management system.

The GPs will be able to simply complete the referral form electronically and send it to a specialist within any of the three Auckland DHBs.

This project builds on the success of the e-referrals project in Hutt Valley and sets the standard for e-referral solutions to be rolled out throughout New Zealand by 30 June 2011.

There is also progress in standardising the information that leaves with a patient when they are discharged from hospital.

The National Health IT Board has, through its Clinical Leadership Group, gained agreement from the colleges and professional groups for a standard e-discharge summary.

This summary will be rolled out progressively over the next 12 months.

New Zealand Universal List of Medicines

One final initiative I must mention is the release of the New Zealand Universal List of Medicines, as it is the first significant step to be achieved towards developing the foundation for the National Health IT Plan.

The Medicines List was released in early June for an evaluation period.

The List is a one-stop shop for medicines information: a universal reference of pharmaceutical descriptions that can be commonly understood by health professionals and integrated into health IT systems.

Shared care plans

Once we have consolidated our systems and set the foundations for sharing information, the focus will be on developing a "shared care" capability.

Clinicians, and the patient themselves, will in the future be able to have access to a single care plan, plus the patient's historical notes, anywhere, anytime they like - even in their own homes.

The ultimate goal is to enable wide-spread adoption of technologies such as telemedicine and home-based remote monitoring.

This will be especially important for people living in remote rural areas and for those with long-term conditions, such as cardiovascular disease, diabetes and asthma.

Broadband investments

Delivering services such as telemedicine and home-based remote monitoring direct to a person's home is being made more possible by the Government's national broadband investments, which aim to roll-out ultra fast broadband (enabling speeds of up to 100mbps) so that it is available to 75 percent of all New Zealanders.

There are two Government ultra-fast broadband initiatives:

 the first, the Ultra-Fast Broadband Initiative is currently focusing on 33 candidate urban centres

 the second is the Rural Broadband Initiative, which extends coverage to rural areas - schools and health sites of significance to the local community, including hospitals, and primary health care sites such as Integrated Family Healthcare Centres, which will move some health services from the hospital setting into the community.


Health Conclusion

In this patient-centred, integrated healthcare model, the needs of patients come first.

Having health information more readily available to patients and their clinical team is quite a change.

Consumers are being asked to consider the issues associated with shared care records in a series of regional community workshops being run over the next few months by the National Health IT Board.

To summarise, with the establishment of the National Health IT Board there is a new energy and urgency to remove the knots in the health system, and to get information flowing seamlessly and securely.

Strong leadership and collaboration are critical.

IT is clearly a part of the solution.

IT is an enabler to achieving the service redesign required to create a world-class person-centred health system.

The health IT community must not move forward alone, but must engage with clinicians and consumers on how health information should be captured, stored and shared to enable better health outcomes for New Zealanders.

Let me now switch to my role as Minister of Revenue.

In that role, I am responsible for the tax system where we are currently taking very significant steps to enhance productivity in the private sector and value for money in the public sector by removing complexity.

Business Transformation

Later this year, student loan legislation will be introduced in the house which will usher in reforms to the tax system.

The Student Loan Scheme Bill is of interest to us here today because its changes will mark a new direction for the tax system, putting greater emphasis on an electronic environment to improve services and achieve greater certainty, reduce compliance costs, and create a new business model for Inland Revenue

The key changes are:

• implementing a new electronic loan management system which will allow borrowers to manage their loans in an electronic environment, giving them a seamless view of their loan from the time that they borrow the money to the time it is repaid.

• removing the current annual assessment for the vast majority of borrowers whose income is largely from salary and wages only. Repayment deductions made from salary and wages would be considered full and final for the pay-period To reduce the time borrowers must spend on managing their loan accounts, and to improve the overall service to borrowers, minor under-or over-payments would be ignored.



The Student Loan Scheme Bill is the first part of wider reforms to build a world-class tax system that delivers certainty for taxpayers, that allows customers to interact with Inland Revenue speedily, that provides good value for money, and that builds trust and integrity in the system, leading to high compliance.

I expect that in future people will spend a lot less time and effort on their tax obligations.

Inland Revenue aims to conduct most transactions online over the next few years - and stop mailing out 30 million envelopes a year!

Making Tax Easier

The Government is currently consulting on proposals about how the tax system could be administered to make it easier and more certain for taxpayers to manage their tax obligations.

The making tax easier site explains proposals and displays responses.

It is simple to register - you can even use your Facebook profile.

Key changes proposed include a shift from Inland Revenue's current emphasis on paper-based systems towards greater use of customer-focused online technologies.

This includes ways of simplifying PAYE and income tax returns for individuals and employers, and providing for people to self-manage most of their tax and social assistance entitlements such as Working for Families.

This would be done through people having their own secure area on Inland Revenue's website, much like internet banking, making the whole process easier, faster and more certain for taxpayers

To further simplify and reduce the number of interactions that individuals must have with Inland Revenue, a new approach is being proposed, which for some people would mean PAYE would be treated as a final tax, not because we want to deprive them of income that is rightfully theirs, but because we will have got their tax deductions absolutely right from the outset.

More timely and correct information would mean that tax is deducted at the right tax code each pay-day, so there would be a reduced need for an end-of-year square-up.

This would give people greater confidence that the amount of tax they pay throughout the year is correct, with no unexpected tax bills arising at the end of the year.

For businesses, including employers and the not-for-profit sector, PAYE tasks such as filing an employer monthly schedule could be managed by software that automatically communicates with Inland Revenue.

Such a move towards electronic technologies would require all businesses and employers to eventually move to electronic filing.

Many businesses now use accounting software, and that software holds the information which businesses need to provide Inland Revenue.

The logical thing is to get that information straight out of that accounting software and send it to Inland Revenue.

The sensible and efficient way to do this is for Inland Revenue to work closely with software developers to help them build the software that can do this.

This collaboration between Inland Revenue and software developers will enable the development of innovative new software that will significantly reduce the complexity businesses face when dealing with routine tax matters.

As well as collaboration between the private sector and government, collaboration within government can also reduce complexity.

At the moment, different government agencies typically collect information from people for their own purposes.

This means people may have to provide the same information to different government agencies, or are surprised when one government agency does not know something.

Time would be saved, both out there in the community, and within government, by government agencies collaborating over information.

Consultation is open till 23 July.

These proposals affect everyone and the Government wants to know what you think, so go online to comment.


Service Transformation


Cross-government work to support shared customers, mainly between Inland Revenue and the Ministry of Social Development, Internal Affairs, Justice is currently underway.

We are looking at:

o A shared online and voice channel for MSD and Inland Revenue customers (eventually other agencies) - a business case being prepared

o Managing Debt: focusing on operational improvements, preventing customers getting into debt, and agency efficiency

o Working for Families: looking at opportunities for improving service and cutting repetition for joint customers

o Student loans: working to develop joint online services (eg ability to view loans across all agencies) and improving collection for overseas-based borrowers

o Seniors - exploring incorporating the tax code form as part of the superannuation application process with MSD.


As you can see then, there are substantial developments and changes both in Health and in Inland Revenue that align to the issues you will be dealing with today.

They are strong commitments from the government sector, and there are no doubt many others in other government departments and agencies.

In putting them before you today, I can only encourage you in the directions that you will be exploring at this important event.

They are important next steps for our nation, as we keep pace with an ever-changing world.

Thank you.