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The NSW government will spend nearly $890 million over four years on incentives and other measures to attract and retain health staff in rural and regional areas.
The coalition government said the plan was the largest shake-up of its kind in the state's history.
The $883 million budget announcement includes incentives of up to $10,000 for workers to take up and maintain jobs in rural and regional NSW.
It also includes funding for increased training for nursing graduates and medical interns, expanding rural GP roles, increasing Indigenous cadetships and HECS incentives for allied health professionals
Regional Health Minister Bronnie Taylor said the funding package would be used to offer financial and other incentives to health staff who moved to or remained in regional areas.
"Hard-to-fill, critical roles in rural and remote locations can be incentivised by offering health workers recruitment and retention incentive packages worth up to $10,000 per year plus assistance with accommodation and relocation and some other non-financial incentives," she said.
The package also included an expansion of training positions for nurse practitioners in rural locations where it was difficult to attract doctors.
"These are highly skilled nursing professionals that can operate autonomously in complex clinical settings," Mrs Taylor said.
NSW Deputy Premier Paul Toole said the incentives were designed to attract more clinicians and to encourage staff to "put down roots" in regional areas.
The Australian Medical Association welcomed the package but said the incentives needed to be extended to doctors in order to address shortages in the bush.
"Doctors are central to the provision of healthcare, and we need to ensure that measures aimed at building our regional health workforce are extended to all clinicians," AMA (NSW) president Michael Bonning said.
A year-long parliamentary inquiry into rural, regional and remote health resulted in 44 recommendations being handed down in May.
These included the NSW government working with the federal government and various bodies to increase rural GP and specialist training positions as well as urgently increasing numbers of nurses and midwives.
Following the inquiry, Mrs Taylor said her top priorities were strengthening the workforce and working with the federal government to expand GP numbers.