The announcement of money to complete a business case for a "desperately needed" hospital in Melbourne's fastest-growing municipality was greeted with laughter by local campaigners who were hoping for much more.

Jill Hennessy, the Victorian Health Minister, pledged a re-elected Andrews Government would spend $2.3 million to start planning a public hospital in Melton.

It came just days after advocacy group, National Growth Areas Alliance, made a plea for a hospital to be built in the outer western suburb, stating the region had a bigger population than regional cities like Ballarat and Bendigo.

But the announcement made at an ABC Radio Melbourne public forum in Melton, was met with laughter and not applause.

"You can hear their response," said host Jon Faine.

"You're not offering them a hospital, you're not buying land. You're not saying we're going to build a hospital, you're saying you'll do a business case."

Local doctor Marcus Watson, who has been at the forefront of the campaign, said he had been hoping for much more.

"We desperately need a new hospital," he said.

"I hear political speak. We're investing in a Footscray Hospital. That's 40 kilometres away from Melton.

"We have a saying in emergency medicine that geography is destiny.

"If you're that far away from a hospital when you have your acute medical emergency you're not going to do well."

Population still growing

Defending the announcement, Ms Hennessy said the business case would be complete by 2020.

"I am ambitious for us to commence building a new hospital for Melton before the next term, but we have to do the business case and that's what I'm committing to do," the Health Minister said.

Local doctor Marcus Watson described Health Minister Jill Hennessy's promise of a business case as "political speak". ( ABC News: Nicole Mills )

Bronwen Clark, the chief executive of the National Growth Areas Alliance, said construction needed to start as soon as possible because the population was growing and the need would increase.

"We know that's going to be a quick turnaround," she said.

"But by then there'll be another 40,000, 50,000, 60,000 people living in Melton."

Melton Mayor Bob Turner wants the Government to start building before the next state election in four years' time.

"Over the years, Melton has been a very safe Labor seat. Seven thousand people a year are moving into Melton. They're not all Labor voters," he said.

The Mayor said the area was also dealing with a shortage of schools.

"We need a new school here every year for the next 23 years to cope with the demand," he said.

"We've got secondary schools built for 400 people which have got 1,100 kids in them. The secondary school's got 23 portables on the grounds."