The Government’s new health budget includes $680 million in capital spending for health infrastructure improvements.

HB Hospital is on the upgrade list, but in official budget documents it’s impossible to tell how much money is involved or how it would be spent. However, clearly a ‘new hospital’ is not in the cards. Instead, a series of band aids, termed ‘redevelopment’.

Here’s the wording in Budget 2026 announcement documents: “Design and initial work for redevelopments at Tauranga, Hawke’s Bay, and Palmerston North regional hospitals through Tranche 2 of the Regional Hospital Redevelopment Programme.” 

And: “Funding for design and some enabling works for the redevelopments at Tauranga, Hawke’s Bay, and Palmerston North hospitals will help address critical infrastructure pressures while supporting future expansion. This investment will fund design work, site planning, and early enabling works through the Regional Hospital Redevelopment Programme.”

One local insider suggests: The design/site planning will probably be for the demolition of the older buildings on the northeast side of the property – Villa 6, Māori Health and Cashmore buildings – to get ready for the relocation of the Emergency Department and Intensive care service.

Back in April 2025, BayBuzz reported here on HB Hospital improvement projects that were identified in the Government’s then-released . We received this comment from Health NZ spokesperson Aaron Matthews, Health NZ Head of Infrastructure Planning & Investment:

“Hospital redevelopment refers to a major investment to bring the whole of the hospital campus up to contemporary standards. This is equivalent to other hospital redevelopment projects that are currently occurring in Nelson and Whangarei. Specifics around the projects such as costs, service uplifts, and specific timing are not yet available.”

“The ED and ICU are known to need investment, and these will occur to provide targeted improvements.”

BayBuzz will continue to seek more detail.

Meantime, here’s an excellent review we’re re-publishing of the Government’s overall Budget 2026 health spending.