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Health remained the second-biggest puller on the Government's purse strings, receiving $17.85billion in the Wellbeing Budget.
Health Minister David Clark, whose Dunedin North electorate includes the new hospital, said people across the lower South Island had waited too long for the ageing hospital to be replaced.
Funding for the hospital was absent from last year's Budget, but could be included this year as planning for the $1.4billion project had progressed further.
"Budget 2019 sets aside funding for the Dunedin Hospital rebuild in a contingency in anticipation of a business case being completed,'' Dr Clark said.
"The funding will be allocated over the 10-year life of the project.''
A total number for Dunedin Hospital was not in Budget documents, but $1.3billion in operational contingencies and $1.7billion in capital contingencies were said to include the required amount for the rebuild.
As foreshadowed in Tuesday's Government response to the Mental Health Inquiry, a substantial investment in the area was announced, a $1.9billion package which included $40million for suicide prevention initiatives.
Southern District Health Board mental health director Evan Mason welcomed the increased spending, especially money promised for frontline services.
"We know that adverse childhood experiences, abuse and negative experiences lead to increased levels of mental distress and poorer ability to cope.
"The increased social spending generally should lead to better mental health, increased social resilience and reduced levels of disability over time.''
Mental health worker Kerry Hand echoed Dr Mason, saying investment in frontline services was exactly what was needed.
"Dr Clark has picked up the challenge laid down by the Mental Health Inquiry regarding `the missing middle' [of low and medium-needs patients],'' he said.
"Up until now communities have been denied the access to services they deserve.''
Mr Hand hoped that would equate to about 200 workers scattered across Otago and Southland.
"They have to be spread widely and in many venues.''
National health spokesman Michael Woodhouse said the Budget had failed to address the huge deficits being racked up by district health boards, and $569million "will hardly be enough to even keep the lights on''.
"DHBs are going to have to start the new financial year already needing to scrimp and save, as this Budget doesn't give them enough to get ahead when DHBs are heading for deficits of $500million by the end of June.''
- Money ringfenced for the $1.4billion new Dunedin Hospital.
- $1.9billion mental heath package.
- $1.7billion over two years for hospital repairs.
- $2.9billion extra funding for district health boards.