Prescription charges are rising for the first time in 20 years.

Minister of Health Tony Ryall has announced an increase in the $3 prescription charge to $5 per item, up to a maximum of 20 items.

The change will take effect from January 1 next year.

Mr Ryall defended the hike in prescription charges, saying the money would be invested in the health sector.


"Despite tight financial times and what will be a zero Budget on May 24, health will receive a big funding boost, which will come from savings within health and across the Government's accounts."

Mr Ryall said the savings from the increase in prescription charges would amount to $20 million in the first year and $40 million in subsequent years.

The Budget will provide $101 million of extra funding over the next for years for more elective operations and scans, and improved cancer services, he said.

The Medical Association has welcomed the move, saying the funding will reduce waiting times for cancer treatment and operations.

"It is particularly pleasing to see the Government's commitment to improve health services in a time of financial constraint. It is encouraging to see that funding includes an investment in IT systems to facilitate faster access to diagnostic tests to determine if patients need an operation or treatment,'' said NZMA Chair Dr Paul Ockelford.

He said the increase in prescription charges was small and was "unlikely to be a barrier for most".