Medical officer of health for Bay of Plenty and Lakes District Health Board Dr Phil Shoemack said he supported the vaccine funding.
"We've been waiting for this for quite a while. It's a common infection in childhood globally and it's not necessarily any more common in developing countries than in developed countries because it's not associated with poor hygiene or water quality, it's just associated with being kids. By the age of somewhere between 3 and 5, virtually all children have been infected with rotavirus."
The illness could have a significant effect on a household if parents had to take time off work, particularly if a child had to be hospitalised, he said.
Pharmac's proposal follows calls by the Paediatric Society of New Zealand earlier this year urging the Government to give "urgent priority" to vaccinating all babies against rotavirus.
The society said hospitalisations for infectious diseases rose by 51 per cent in the 20 years to 2008, with the biggest increases in poorer areas where infections spread in overcrowded housing.
Diarrhoea and vomiting caused by stomach and intestine infections (gastroenteritis) was the most common medically preventable cause of acute hospital admissions in Kiwi children, and rotavirus accounted for 42 per cent of gastroenteritis admissions in children under 3 - between 300 and 400 hospital admissions a year.
The World Health Organisation recommended vaccinating all babies against rotavirus in 2009 and Australia has included it in its free immunisation programme since 2007.
Features of the proposals include:
Rotavirus vaccine would be added to the funded list for all eligible patients.
Varicella (chickenpox) vaccine would be funded to protect the most at-risk patients - children with reduced immune systems (for example, because of chemotherapy).
The vaccine would also be funded for people in direct contact with these children.
Public submissions close on November 20. If approved, changes to the immunisation schedule would take effect from July next year.
Meanwhile, health professionals are warning families not to drop their guard against influenza despite a mild winter flu season this year.
Very young children (0-4) and elderly (65+) had the highest influenza-associated hospitalisation rates this year, according to research by the Institute of Environmental Science and Research.
additional reporting Simon Collins