The mayor of central Otago says proposed budget cuts for the region's main hospital would be disastrous.

Photo: RNZ / Ian Telfer

The Southern District Health Board (DHB) has said it is considering how to reduce expenditure at Dunstan Hospital, which is near Alexandra, by 5 percent next year.

"Southern DHB is required to live within its means and this means reducing expenditure across the whole sector in order to reduce our financial deficit," chief executive Carole Heatly said.

Community meetings are planned from next week in Alexandra, Cromwell and Lake Wanaka.

Photo: RNZ / Ian Telfer

Central Otago mayor Tony Lepper said the hospital feared the cuts could be even greater.

He said he had met with hospital representatives yesterday, who told him they might lose up to eight of their 24 beds.

"They're calling it - in real terms - a 12, 15 percent cut in funding and the only place we can do that is in in-patients and that's the beds," he said.

"That will mean transferring patients down to Dunedin [Hospital], which is a more than three-hour trip.

"As it is, we're the furthest you can get from a major base hospital so it's not good for our population."

Association of Salaried Medical Specialists executive director Ian Powell said all six of its members at Dunstan Hospital had expressed concern about the potential cuts.

He said their main fear was a reduction of services at the hospital and job losses.

"The main issues we think will be a reduction in the range of services that the Dunstan Hospital is able to provide its population," he said.

"Also risks for staff - not just doctors - but other staff as well.

"There may be some job loss, we're not sure about that, but it certainly means they'll be working in more difficult conditions."