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An extra $2.2 billion will be pumped into health over four years to help cope with an ageing population and record immigration.
A large portion of the funding boost will go to district health boards - they will get an extra $400 million in 2016/17. Last year's Budget gave DHBs less than that - an extra $320 million - over a four year period.
And close to $40 million will be allocated to start a national bowel screening programme - something health professionals have called for, and a measure on the Cancer Society's wish list.
Once in place, the programme will screen about 700,000 people every two years. DHBs will offer people aged 60 to 74 a bowel screening test every two years.
The Government will claw some money back through increased tobacco excise - which will rise by 10 per cent on January 1 each year until 2020, a change expected to bring in $425 million in that period.
Health Minister Jonathan Coleman has fended off attacks of health underfunding from opposition parties, particularly from Labour's health spokeswoman Annette King, and today's Budget outlines a much bigger new spending programme than last year's.
The extra funding over the next four years includes:
• $1.6 billion for district health boards.
• $96 million to provide more elective (non-urgent) surgery, to ensure National meets its long-running target of having about 4000 more elective surgical operations carried out each year.
• $39.3 million to begin a roll-out of a national bowel screening programme.
• $18 million to expand the "Healthy Homes" initiative, which aims to cut preventable diseases in young children living in cold, damp homes.
• $12 million to expand intensive alcohol and drug support for pregnant women.
• $12 million for mental health services.
• $124 million for Pharmac to provide access to new medicines, which was announced in the run-up to the Budget. Pharmac will likely fund next generation melanoma drug Opdivo. Other drugs in the funding pipeline include one for hepatitis C infection, and another to treat brain tumours.
• $169 million for disability support services.
Dr Coleman said investment in health would reach a record $16.1 billion next year.
In the lead-up to the Budget, CTU economist Bill Rosenberg said District Health Boards needed an increase in $551 million to maintain the current level of DHB services.