Emergency and elective surgery waiting times at Shellharbour Hospital are expected to reduce with a federal government cash splash.
As announced in the Mercury, Prime Minister Scott Morrison said $128 million would be spent on the hospital's redevelopment while he toured the facility on Monday.
The upgrade of the 33-year-old facility would see more money also spent on mental health services, rehabilitation as well acute and ambulance services.
"The demand in Shellharbour for hospital services only continues to grow," Mr Morrison said. "More young families and older residents put a lot of pressure on local hospital services.
"This is a much needed upgrade to ensure the hospital and staff can continue to serve the community."
Mr Morrison, flanked by candidates for Gilmore Liberal's Warren Mundine and The Nationals' Katrina Hodgkinson, was followed by a media scrum around the small corridors of the facility.
He spoke to patients about the level of care provided and to staff about the recent upgrades at the hospital including at the radiology ward.
The hospital is in the federal electorate of Whitlam, not the marginal seat of Gilmore. There is no Liberal candidate for Whitlam and Liberal candidate for Cunnignham Chris Atlee was not present.
It means people who previously had to go up to Wollongong can now get that service right here.
The funding is not an election commitment and has been allocated in the most recent Budget.
Whitlam MP Stephen Jones welcomed the funding and said a Labor government "would of course match the $128 million investment".
Mr Jones is also calling on the Prime Minister to match the $35 million investment into Shoalhaven Hospital as promised under a Labor government.
Mr Morrison made no commitments that Wollongong Hospital would receive any funding.
"One of the reasons we are upgrading Shellharbour Hospital is that it will relieve pressure from Wollongong Hospital," Mr Morrison said.
"It means people who previously had to go up to Wollongong can now get that service right here.
"With 20,000 more people expected, you are going to want to have the hospital here able to deal with that [population growth] rather than increasing the stress on other hospitals along the South Coast and up in the Illawarra."
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Illawarra Shoalhaven Local Health District Board chairman Denis King said the funding gave the board more flexibility in how Shellharbour Hospital would be upgraded.
"Shellharbour and the whole district is struggling under the workload and this will let us rethink what we can do at Shellharbour to make it a larger, more complex hospital," he said.
"The funding gives us options to improve services for the residents of southern Illawarra and improve care across the district because a lot of the work that could be done at Shellharbour goes up to Wollongong. That hospital is just drowning. This is a fabulous announcement."
Mr King said the funding, which is on top of the $251 million investment already committed by the state government, would allow the board to upgrade the existing facility and "seriously consider" moving to a new greenfield site.
"[The plans we have may be] too big for the site and we may have to consider moving elsewhere," he said.
Liberal candidate Warren Mundine said the money allocated for the Shellharbour Hospital redevelopment would benefit the residents of the northern suburbs of Gilmore.
Nationals candidate Katrina Hodgkinson also welcomed the announcement and said "it was great" to have such a significant sum of money allocated to a state facility.
"It is an older-style building which is cramped with narrow corridors," she said. "The nursing and medical staff are absolutely amazing as are the patients. But it needs an update."
The funding has been allocated from the $534.4 million in new health funding announced by the federal government during the Budget and funded through the $1.25 billion Community Health and Hospitals Fund.
Mr Morrison earlier toured a chemical producer in South Nowra to demonstrate the sort of business that could benefit from a new $50 million fund aimed at encouraging manufacturers to invest in more modern technology.
The government would offer grants of up to $1 million for upgrades, if manufacturing firms spend at least three times as much.
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