'It's just the reality': why the John Hunter needed an extra $55 million

The state government will kick in another $55 million for the John Hunter Hospital precinct due to "cost escalation", taking the project's price tag to almost $900 million.

Stage one of the John Hunter Health and Innovation Precinct has been allocated $835 million since it was first announced by the former Liberal government in 2019.

The new money will take the total value to $890 million. NSW Health Minister Ryan Park said the extra $55 million - which would take the project's total value to $890 million - was necessary to cover the "cost escalation since 2020".

"It's not a criticism of the former government's budgeting, it's just the reality of cost infrastructure over that period of time," Mr Park said.

Treasurer Daniel Mookhey said the further investment was to make sure the full scope of works was realised at John Hunter.

"The Hunter community deserves the hospital they were promised, even if costs have increased. The alternative is to make cuts and we're not doing that," Mr Mookhey said.

"We're using this budget to ensure working families have world-class healthcare in their neighbourhoods."

Stage one of the redevelopment includes a new seven-storey acute services building with 22 operating theatres, birthing suites, a neonatal intensive care unit, and a new emergency department to meet a projected future demand of more than 95,000 presentations each year.

Multiple organisations have called upon the state government to provide funding to begin the second stage of the precinct, which is expected to cost at least $900 million. It would include 15 new inpatient wards, three refurbished wards, a new chemotherapy unit and 12 new intensive care beds.

Business Hunter says the government should commit $75 million in the upcoming budget, which would cover a new paediatric oncology unit, the fitout of two new wards and the refurbishment of administration and staff areas.

The Committee for the Hunter says at a minimum, the government should fork out $5 million to undertake master planning of the second stage.

On Monday, the NSW government revealed it will invest a record $3.6 billion in hospital infrastructure in the upcoming budget, the largest single-year health capital investment in NSW history.

That figure includes a $400 million "maintenance blitz" for the state's struggling public hospitals, including in the Hunter.

The funding follows a Newcastle Herald series on the mould and maintenance scandal at the Calvary Mater hospital.

This led to a parliamentary inquiry put forward by the Coalition and backed by the Greens, which Labor opposed.