District health boards that have complained of chronic underfunding will receive a massive boost - $549 million each year for the next four years.
That's a total of $2.2 billion of new capital, with up to another $100 million over 10 years set aside for DHBs struggling with deficits.
The Budget also delivers $126m to keep up with demand for elective surgery.
"We all know DHBs have been starved of funding in recent years. That's put pressure on staff and facilities – and put the squeeze on services delivered to the public," Health Minister David Clark said.
"Budget 2018 allocates $750 million of new capital to tackle some of the most urgent building problems facing hospitals around the country. That represents the biggest capital injection in health in at least the last decade."
Clark said it was the largest DHB funding increase in the last decade but added that rebuilding the health system after nine years of neglect would take sustained investment.
"New Zealanders have been shocked to discover that hospitals in some areas are literally rotting after a decade of neglect and underinvestment by the previous Government. There is a significant backlog of work, which will take more than one Budget to remedy.
"The new funding will mean DHBs can plan with more confidence and put forward business cases for important projects that have been put off for too long, such as infrastructure remediation, capacity investments and urgent building projects."
Free and cheap GP visits extended
Free doctor visits and prescriptions will be extended to all children aged under 14, up from under-13s at present. The Government estimates it will include another 56,000 children. That will come at a cost of $22m over four years.
As well, eligibility for the Community Services Card will be extended to all people receiving the accommodation supplement or income-related rent subsidy.
Access to very low-cost GP visits, around $20 to $30 cheaper, will be extended to all Community Services cardholders.
"These two initiatives will require $362.7 million [over four years] of new funding and will have a major impact on people's health and wellbeing," Clark said.
"The Coalition Government is already supporting middle- and low-income families with our Families Package, which comes into force on 1 July this year. Today's announcement gives about 600,000 New Zealanders better access to healthcare from 1 December this year," he said.
More support for midwives
Community-based midwives will receive an 8.9 per cent 'catch-up' increase in their fees, around $4.5m this financial year, to close the pay gap between them and their DHB-employed colleagues.
The move is part of $112.6m over five years for maternity services.
"There is no question that over the last decade the fees paid to community-based midwives have not kept pace with the pay increases of their colleagues employed by District Health Boards. That is simply not fair, and the 8.9 per cent increase will address that gap," Clark said.
The increase, calculated on a range of factors including CPI and DHB collective agreement increases, means that average annual increases over the last decade for community midwives are now in line with average increases for DHB midwives.
"Today's package also includes funding to help ensure safe hours of work. Currently, midwives who call on colleagues to take over care during a lengthy labour have to fund this out of their own fees. The Budget provides $16m over four years to assist midwives with these costs," Associate Health Minister Julie Anne Genter said.
More for bowel screening and disability support services
The National Bowel Screening Programme has received a big boost, with $67.1m over four years to expand the programme to another five DHBs on top of the five already in operation. The money will also go towards establishing a national co-ordination centre, four regional screening centres and IT for the programme.
Disability support services will get $210m over the next five years to cover population growth, ageing and cost pressures. At present more than $33,000 New Zealanders need help for physical, mental or sensory disabilities.
Other initiatives being funded are:
• $60m over four years, as well as $22.9m from ACC, to strengthen and modernise the national air ambulance fleet.
• A one-off $1m for work to develop a free annual health check for all SuperGold card-holders, an initiative agreed in negotiations with NZ First.
• $17m over four years to expand the nurses in schools programme to all public decile 4 secondary schools, covering an extra 24,000 students. The programme currently covers decile 1 to 3 secondary schools and teen-parent units.
• $10.5m over three years will fund a pilot programme giving young people aged 18-25 free mental health counselling and therapy, a Green Party initiative.