Democracy Briefing: Waikato Medical School – A Costly case study in policy capture

The Government's decision to proceed with establishing a new medical school at the University of Waikato is not, at its core, a decision about health policy. It is a decision about political power, influence, and the erosion of good process. This project serves as a textbook case study of policy capture, where the interests of a well-connected institution, amplified by high-powered lobbyists, have overridden expert advice, fiscal prudence, and superior alternatives.

A Backroom deal “gifted” to National

Documents show Waikato Vice-Chancellor Professor Neil Quigley worked hand-in-glove with National’s previous health spokesperson Shane Reti to shape the policy – even promising the proposed school would be “a ‘present’ to a future National government”. In March 2023, Quigley emailed Reti that having the first intake of Waikato medical students by 2027 would be “a present to you to start your second term in government!”. It seems that this is coming to pass. And it now looks more and more like pork barrowed politics.

This astonishing level of partisan coordination undermined any pretence of an objective policy process. The university effectively co-authored National’s policy for its own benefit, compromising the independence we expect from public institutions. In fact, Waikato University even helped pay for National’s campaign announcement of the med school plan – spending about $5,000 on the party’s publicity event. Such cosiness between a university and a political party is highly unusual and inappropriate, raising serious questions about conflicts of interest and integrity.

Government officials certainly saw red flags. “Government officials have raised significant concerns about the University of Waikato’s ambitious proposal to establish New Zealand’s third medical school,” I reported back in April 2024 – see: Waikato Med School – National’s zombie "pet project" won’t die.

Even within the bureaucracy, alarm bells were ringing that this project was being driven by politics rather than merit. Advice from Treasury, the Tertiary Education Commission and the Ministry of Education all warned of the venture’s bloated costs, duplication risks and logistical hurdles, especially given the government’s rush to deliver it.

In other words, experts within the system recognised early on that the Waikato med school was a solution in search of a problem – or worse, a political trophy project. Yet those concerns were ignored in the deal-making frenzy between National and the university.

The proposal magically found its way into the incoming government’s 100-day plan in late 2023, cementing a quid pro quo that National would fund Waikato’s dream project after the election. It’s a textbook case of policy being shaped by vested interests through backroom channels, rather than by open analysis of what’s best for the country.

Lobbyists and Cronies Driving Policy

It’s no coincidence that this dubious deal advanced on the backs of two of Wellington’s most well-connected lobbyists: Neale Jones and Steven Joyce. Waikato University hired Jones – Jacinda Ardern’s former Chief of Staff turned lobbyist – on a $6,900 per month retainer from 2020 to 2023 to push the medical school agenda in the Beehive.

When Jones reported Labour was “a lost cause”, the University pivoted to paying Steven Joyce – a former National Party Finance minister – eye-watering sums as a consultant to lobby his old colleagues. Joyce’s firm was eventually paid about $1 million over three years by Waikato for “consultancy,” which essentially meant leveraging his political influence to get the med school approved. Former National Party staffers Anna Lillis and Kenny Clark were even brought in to run the university’s communications for the project, completing the circle of political insiders. This is influence-peddling in its purest form: a public university spending public money to employ partisan operatives to lobby politicians of both stripes.

As I noted at the time, it’s become a classic case study in why lobbying deals with politicians need greater scrutiny – see: Lobbying for Waikato’s Medical School Causing Problems for the Govt. The revolving door between government and lobbying swung wide open here – and the Waikato project marched straight through. Former minister Joyce acted as the go-between linking the university and National, while Jones worked his contacts in Labour. Together, they greased the wheels for a policy victory that the university couldn’t win on evidence and merits. The appearance of cronyism is unmistakable.

Indeed, when Labour ministers proved uninterested in Waikato’s proposal (one email had Quigley complaining then-PM Ardern dismissed it as “too expensive” nonsense), Joyce advised the university to launch a public pressure campaign to “shame” the Government into backing down. “Governments often change their views when they want to hold seats,” the ex-politician counselled, urging an overtly political strategy. Such cynicism paid off once National took power. Joyce’s lobbying outfit had successfully “convinced his former colleagues to hand over the money” for Waikato’s expensive scheme. The rest of us – taxpayers, other universities, healthcare stakeholders – were left on the sidelines as this insider deal rolled forward.

Questionable procurement and Auditor-General scrutiny

Perhaps nothing illustrates the integrity failures at play better than the way Waikato University hired Steven Joyce. Normal public sector practice (and the university’s own rules) demand open, competitive procurement for contracts of that size. Instead, Vice-Chancellor Quigley simply hand-picked Joyce’s firm without any tender, invoking an “exceptional circumstances” clause to waive procurement rules. There was no documented business case, no evidence that Joyce’s outfit was uniquely qualified – nothing to justify a no-bid $1 million deal, as the Auditor-General later found.

In May 2024, Auditor-General John Ryan effectively scolded Waikato University for sidestepping basic accountability. In a public letter, he said the university “does not seem to appreciate that it is accountable to Parliament and the public for whether it has followed appropriate processes when spending public money”. The university was “dismissive of its public accountability”, providing scant explanation for why Joyce was the only option and why he was worth over a million dollars of public funds. Ryan noted that such an explanation – and the assurance it would give taxpayers that their money was well spent – “is missing.” In other words, a public institution bent its own rules to employ a politically connected fixer, then shrugged when asked to justify it.

This lack of transparency and due process is antithetical to good governance. The entire Waikato med school saga has unfolded via secret contracts, private lobbying meetings, and politically wired relationships – all largely hidden from the public until journalists and watchdogs pried it into the light. Had RNZ’s Guyon Espiner not uncovered the emails and lobbying arrangements, taxpayers might never have known how deeply political this “policy” really was. The Auditor-General’s intervention underscores that even at arms-length institutions like universities, spending public money in the dark is unacceptable. Yet those involved – the university leaders and their political agents – behaved as if winning the deal was more important than following the rules. Such ends-justify-means thinking erodes public trust. It also sets a dangerous precedent: if you’re a favoured insider with the right connections, normal standards don’t apply. The Integrity Institute exists to challenge exactly this kind of cozy insider syndrome. Unfortunately, the Waikato med school affair reads like a case study in New Zealand’s growing “Chumocracy,” where who you know matters more than what you propose.

Flawed rationale and ignoring better alternatives

If the process failures weren’t bad enough, the actual policy rationale for a Waikato medical school has always been paper-thin. The economic and educational arguments in its favour collapse under any serious scrutiny. Waikato’s proposal rests on the claim that building an entirely new medical school from scratch (with a focus on graduate-entry, rural-oriented training) is the best way to address doctor shortages, especially in underserved areas.

That sounds noble, but experts have pointed out that it’s an inefficient, duplicative solution – especially compared to simply expanding the existing medical schools at the University of Otago and University of Auckland. In fact, the deans of Otago’s and Auckland’s medical faculties fiercely oppose the Waikato plan and commissioned an independent analysis by PwC to prove its deficiencies.

The PwC report found New Zealand could increase medical student numbers far more quickly and cheaply by boosting capacity at Auckland and Otago, with only “minor” capital expenditure needed. Those two schools already have nationwide training networks (Auckland even has a clinical campus in Hamilton) and a “diverse range of entry pathways” including for rural students.

By contrast, a new Waikato school would face major hurdles – obtaining accreditation, recruiting faculty, building facilities – all before it ever produces a single doctor. PwC concluded Auckland and Otago could together add 300 more medical student places within a few years (100 as soon as next year) using existing infrastructure. Waikato, on the other hand, wouldn’t graduate its first doctors until 2030 under best-case scenarios. In short, the opportunity cost of pouring hundreds of millions into a new school is enormous when faster, proven alternatives are available.

Even the Government’s own allies have seemed unconvinced by Waikato’s cost-benefit case. Act, in its coalition agreement with National, insisted that a “full cost-benefit analysis” be conducted before the project proceeded. That analysis, now completed, reportedly showed the Waikato plan is marginal at best – yet political pride has carried it forward.

By June 2025, it was clear that the med school idea was “lumber[ing] on between life and death,” as one MP put it, delayed by its shaky economics. The Government’s own Budget 2025 contained no new money for Waikato’s school, suggesting continued scepticism in the Finance Ministry. Fiscal prudence is indeed a glaring concern: the original $300 million public price tag touted in 2023 was laughably low. Health officials warned that costs would far exceed that, given inflation and the higher student intake later agreed (120 students per year instead of 100).

The Otago Daily Times bluntly called National’s pre-election $300m figure “totally unrealistic,” noting that “costs will have soared” well beyond that now. Starting a brand-new medical school isn’t just a one-off construction bill – it’s ongoing operating costs, clinical placement expenses, and likely a need for extra incentives to draw staff and students to a nascent program. All of this for what? Waikato’s promise to produce 220 extra doctors by 2030 – a goal Auckland and Otago could achieve faster and for less money if funded to do so.

Proponents argue a Waikato school will specially train doctors to serve rural and regional communities. But that claim is overblown. There is scant evidence that graduates of a new school would be any more likely to work long-term in remote areas than graduates from existing programs. New Zealand’s rural doctor shortage is a real crisis, but solving it requires targeted policies – bonding schemes, better pay, rural training rotations, supporting nurse practitioners, etc. – not necessarily a whole new medical campus.

In fact, a third school could make things worse by stretching thin the pool of clinical training placements needed to turn medical students into competent doctors. As one commentator observed, “There is no point pumping out part-baked doctors if they have not been well-supervised and received positive practical training. This is already a challenging bottleneck. A third medical school… will not help.”

The supposed rural focus of Waikato’s proposal also ignores that Otago and Auckland have existing rural immersion schemes and satellite programs geared toward rural health. Simply put, Waikato’s case that “this is the only way to get doctors in the provinces” doesn’t hold water. It looks more like a marketing spin to justify an unnecessary duplication. No wonder the wider medical community, from the NZ Medical Association to health academics, have raised concerns that the Waikato project is a vanity project that diverts resources from bolstering what we already have. Even within the coalition, Act’s David Seymour has publicly challenged National to prove the Waikato school is a good use of money, pointedly saying the Government hasn’t come close to making that case.

Undermining transparency and public interest

At its core, the Waikato medical school saga is an illustration of how not to make public policy. The process has failed every basic test of transparency, public accountability, and evidence-based decision-making. A public university and eager politicians cooked up a major spending initiative as a political favour, greased by lobbyists and implemented via dubious means.

The normal checks and balances – open procurement, independent policy analysis, genuine stakeholder consultation – were subverted or ignored. It’s the kind of deal that breeds public cynicism in politics, the sense that big decisions are made on behalf of the powerful or the connected, not the public. As the Integrity Institute has warned, New Zealand’s reputation for clean governance is at risk if we allow this kind of insider influence to fester.

This column is not just about one medical school; it’s about the principle of integrity in governance. What we’ve seen with the Waikato med school is a profound lack of it. The government should be funding health workforce solutions based on merit and need – not because a particular university lobbied hard or a lobbyist arranged a sweetheart deal.

By greenlighting this project in July 2025, ministers have signalled that political paybacks matter more than prudent spending. They have effectively rewarded a campaign of lobbying and pressure that sidestepped the usual contest of ideas. That sets a horrible precedent. It tells every other vested interest: hire the right insiders, make the right donations or deals, and you too can get the government to write a big cheque, officials’ advice be damned.

New Zealanders deserve better. We deserve decisions made out in the open, on the merits, with options compared fairly and money spent wisely. We deserve political leaders who aren’t swayed by the old-boy network of former colleagues and well-paid lobbyists whispering in their ears.

Unfortunately, in the case of the Waikato medical school, those standards were not met – not by a long shot. I wrote last year that the lobbying frenzy around Waikato’s proposal was “causing problems for the Government” – and indeed it has, eroding trust that this Cabinet will put public interest ahead of insider influence. The whole episode is a wake-up call about the need for much tougher rules on lobbying, greater transparency in government-university dealings, and robust oversight of public spending.

It’s also a reminder that integrity is not an abstract ideal; it’s a practical prerequisite for good policy. When integrity is compromised – when deals are done in smoke-filled rooms and due diligence is an afterthought – we end up with outcomes like this: a costly, controversy-tainted project that may not even solve the problem it claims to address.

The Waikato medical school greenlight might be a political win for a few, but it’s a loss for New Zealand’s standards of governance. It undermines confidence that our health investments are made wisely and fairly. And it should prompt some soul-searching in Wellington: if this is how we make big decisions now, what does that say about who really runs the country?

The Integrity Institute’s hope is that by shining a light on such deals, we can spur a return to policymaking built on transparency, accountability and the public good – not on the whims of well-connected insiders. The Waikato saga should go down in history not as a proud achievement, but as a cautionary tale of how easily political integrity can be traded away, and why we must demand much better.

Dr Bryce Edwards

Director of The Integrity Institute

Note to media, journalists, and editors: My above analysis is, as always, available in various abridged formats for publication — just get in contact. Likewise, I am available for interviews on the subject, on behalf of The Integrity Institute - Bryce

Further reading:

Craig McCulloch (RNZ): New medical school at University of Waikato gets government go ahead

Herald: Government announces new $230m medical school at Waikato University

1News: Govt gives green light and $83m for Waikato medical school

Anna Whyte (The Post): Waikato Medical School gets the go ahead (paywalled)

Matthew Hooton (Patreon): Rural Australia celebrates new Waikato Medical School (paywalled)