Funding to reduce rheumatic fever in New Zealand has been halved in this week's Budget.

That is despite the Government's failure to reach a target of reducing hospitalisations for the serious illness, which is one of its top 10 priorities for the public sector.

The Budget shows funding for rheumatic fever has fallen from $10 million a year to $5 million a year.

The disease is often caused by living in cold, damp homes and disproportionately affects young Maori and Pacific people.

The Ministry of Health began its prevention programme in 2011, and expanded it in 2012 after the Government made it one of its Better Public Service targets.

The Government set a goal of reducing the rheumatic fever rate from 4 cases per 100,000 people to 1.4 cases per 100,000 people by mid-2017.

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The rate hit a low of 2.4 cases per 100,000 people in mid-2015, but has since risen again to 3.4 cases per 100,000 people.

Green Party health spokeswoman Julie Anne Genter said the funding cut appeared to show the Government had given up ahead of missing its target.

"We haven't achieved what we want, and I don't see how cutting funding is going to help with that," she said.

"It is quite alarming if the Government is just giving up. It's shocking that we still have such high rates of rheumatic fever in New Zealand.

"There is no reason for that in a country with this level of wealth overall - we need to do better."

The Ministry of Health said preventing rheumatic fever would continue to be a focus for the 11 District Health Boards which had high rates of the illness.

"The funding allocation decision was based on ensuring a strong focus on the population groups that experience more than 90 per cent of all rheumatic fever cases," the ministry said.

"It also addresses the issue of equity for those DHBs that started from a high baseline and were always going to have to do more work to get to the national target."

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The ministry said it was focusing its prevention efforts on Auckland, where more than half of rheumatic fever cases were picked up.