Budget 2023: Government dumps $5 prescription fee

The Government is dumping what it says is a "big barrier" to accessing prescriptions to support about 3 million New Zealanders every year.

From July, Kiwis who get a prescription from the doctor won't have to front a $5 co-payment at the pharmacy - as is currently the case for most medicines. It would cost the Government $619 million.

Health Minister Ayesha Verrall said scrapping the payment would make access to prescriptions "easier and cheaper for New Zealanders… particularly those who have multiple prescriptions to fill on a regular basis".

"This will benefit a huge range of people including almost 770,000 New Zealanders over the age of 65 who received prescription medicines in the community last year," Dr Verrall said in a statement.

She believed free access to medicines would also reduce demand on New Zealand's hospitals.

"This Government is ensuring our health system provides equitable access for all New Zealanders, so they can get the health services when and where they need them, irrespective of where they live," Dr Verrall said.

Hospitals have been under strain since the COVID-19 pandemic from crippling staff shortages, largely driven by the pandemic and worldwide demand for critical health workers.

As part of ongoing work to combat this, the Government said it was allocating $1 billion to the health system for initiatives including boosting health worker pay rates and increasing staff numbers. Of this $1 billion, $63 million would be used to progress "safe staffing and allows for an additional 500 new nurses to be employed", it said.

Another $118 million would go towards trying to reduce hospital waiting times.