There has been a recent article in Huffington Post on the myths around vaginoplasty/phalloplasty/metoidioplasty for trans people.
It's from a US-centric perspective (as usual) and I want to clarify the issues unique to New Zealand.
All surgery of this type is not properly funded by the public health system but instead comes out of the "Special High Cost Treatment Pool" administrated by the Ministry of Health. This pool is shared between numerous different types of surgery not directly funded by District Health Boards. Despite there being no formal number of trans related surgeries funded each year, it informally amounts to three vaginoplasty surgeries and one phalloplasty/metoidioplasty every two years. There have been recent years where no surgeries of this type have been funded, it is at the complete discretion of the Ministry of Health.
The rules around this fund only allow it to be used for overseas surgery if it is not provided by a surgeon in New Zealand (privately or publicly). This is the case for phalloplasty/metoidioplasty but not for vaginoplasty.
There is a single plastic surgeon in Christchurch who does vaginoplasty surgeries, Dr E. Peter Walker. He essentially gets a taxpayer funded monopoly on these surgeries and is able to choose people on the waiting list at his discretion (understood to be around 80-100 people). Rumours abound that he favours a certain type of patient: young "passable" trans women. The technique he favours (ascending colon technique) has many issues and criticisms and most other surgeons do not use it. He has also been formally disciplined after being found with a bag of unwashed surgical instruments dripping blood at Queenstown airport.
Many people opt to try and save for private surgery overseas instead of spending their lives on the waiting list. This amounts to $20,000-30,000 for vaginoplasty and at least three times as much for phalloplasty/metoidioplasty. This is obviously out of reach for many in a class of people so marginalised still in society. Many choose to supplement their income with sex work to be able to save enough.
Despite continued criticism from the Human Rights Commission, the Ministry of Health has refused to even look at improving this situation and is in fact forcing District Health Boards to reduce spending on trans health care. The only publicly funded surgeon who performs mastectomies on trans people has declined to perform any future ones once his current waiting list has cleared.
Virtually all major international health organisations recognise the medical necessity of these surgeries for trans people. The exact cost to the mental health system and to the economy from preventing availability of these surgeries is unknown but it is estimated to be higher than the cost of them by far.