Government secures last-minute hospital funding agreement with the states
/ By Kevin Adams
Government secures last-minute hospital funding agreement with the states
/ By Kevin Adams
Facing intensifying demands from the states, Prime Minister Anthony Albanese pledged an additional $25 billion for the public hospital system, a move intended to end a months‑long stalemate over funding and draw a line under a bitter dispute.
National leaders met in Sydney for a national cabinet meeting on Friday morning and, after protracted talks, reached a deal for a new five‑year funding agreement for public hospital care across the country.
Albanese said the extra $25 billion forms part of almost $220 billion in record Commonwealth support to the states over the next five years, a total he cast as unprecedented in scale.
He said they had struck a landmark agreement that would deliver record funding to state and territory hospital services while also safeguarding the future of the National Disability Insurance Scheme.
He characterized the agreement as among the most significant national reforms in living memory, saying it would ensure Australians continue to access world‑class healthcare alongside disability support for years to come.
Under an agreement negotiated by national cabinet in 2023, the federal government committed to lift its share of public hospital funding to 42.5 per cent by 2030 and to 45 per cent by 2035, setting a new trajectory for the Commonwealth’s contribution.
In return, states and territories agreed to provide some disability services outside the NDIS, including Thriving Kids, a program for children with mild to moderate developmental delay and autism.
The Health Minister, Mark Butler, said today that the start date — originally set for July 1 — may be delayed “by several months” after states and territories sought more time to prepare for the shift.
After the meeting, Albanese said the scheme would begin “this year,” with the aim of becoming fully operational within two years, signalling a phased rollout rather than an immediate switch.
He said the states had proposed a brief delay to full implementation of Thriving Kids, but confirmed the program would start this year and be fully in place by 1 January 2028.
Albanese said the Commonwealth accepted that proposal as a reasonable step to ensure it is done properly, calling it a positive move designed to get the settings right.
The government also reiterated that families currently on the NDIS would remain within the scheme until Thriving Kids is rolled out, to ensure continuity of support during the transition.
He added that national cabinet agreed to work towards an annual growth target of six per cent or less, down from the existing target of eight per cent.
Nicole Rogerson, CEO of Autism Awareness Australia, said the protracted negotiations had unsettled the autism community, which was anxious about what the proposed changes would ultimately mean for them.
She said “everybody needs to put on their big boy pants, and get on with it,” expressing frustration at the protracted talks.
According to Rogerson, the autism community is “so over this,” describing the process as akin to a rush to act followed by inaction — “hurry up, and then do nothing.”
She said she had warned in 2023 that tying the two issues together was problematic and that, even now, the situation remained deeply frustrating for families.
Growth cap remained another sticking point in the talks.
Another source of tension has been how much growth in public hospital activity the Commonwealth will fund, currently capped at 6.5 per cent a year.
In 2023, national cabinet agreed to replace that with a “more generous” model, and under the current offer the cap would be 10.25 per cent in the first year before settling at 8 per cent in the medium term.
Tensions remained high throughout the extended stoush.
For months, the Albanese government has been locked in strained, protracted talks on the next five‑year public hospital funding agreement, with the ABC revealing the Prime Minister wrote to premiers and chief ministers in September urging them to rein in hospital spending growth if they wanted a funding commitment made more than two years ago implemented.
There was also a push to finalise the deal before Friday’s meeting, with the South Australian government entering caretaker mode from February 21 ahead of the state election, narrowing the window for signing.
On Thursday, the Health Minister conceded that if an agreement was not secured by then, striking a deal before the one‑year interim funding agreement expires in June would be difficult, underscoring the tight timetable.
Tensions also flared before Christmas, when the Prime Minister was branded a “grinch” after adding $1 billion to the Commonwealth’s existing offer to lift its contribution by $20 billion over five years.
That offer included a further sweetener: an additional $2 billion over four years to address the increasingly political problem of aged care patients stuck in public hospital beds.
These patients are medically fit to leave but remain in hospital while waiting for a federally funded residential aged care bed.
National leaders met in Sydney for a national cabinet meeting on Friday morning and, after protracted talks, reached a deal for a new five‑year funding agreement for public hospital care across the country.
Albanese said the extra $25 billion forms part of almost $220 billion in record Commonwealth support to the states over the next five years, a total he cast as unprecedented in scale.
He said they had struck a landmark agreement that would deliver record funding to state and territory hospital services while also safeguarding the future of the National Disability Insurance Scheme.
He characterized the agreement as among the most significant national reforms in living memory, saying it would ensure Australians continue to access world‑class healthcare alongside disability support for years to come.
Under an agreement negotiated by national cabinet in 2023, the federal government committed to lift its share of public hospital funding to 42.5 per cent by 2030 and to 45 per cent by 2035, setting a new trajectory for the Commonwealth’s contribution.
In return, states and territories agreed to provide some disability services outside the NDIS, including Thriving Kids, a program for children with mild to moderate developmental delay and autism.
The Health Minister, Mark Butler, said today that the start date — originally set for July 1 — may be delayed “by several months” after states and territories sought more time to prepare for the shift.
After the meeting, Albanese said the scheme would begin “this year,” with the aim of becoming fully operational within two years, signalling a phased rollout rather than an immediate switch.
He said the states had proposed a brief delay to full implementation of Thriving Kids, but confirmed the program would start this year and be fully in place by 1 January 2028.
Albanese said the Commonwealth accepted that proposal as a reasonable step to ensure it is done properly, calling it a positive move designed to get the settings right.
The government also reiterated that families currently on the NDIS would remain within the scheme until Thriving Kids is rolled out, to ensure continuity of support during the transition.
He added that national cabinet agreed to work towards an annual growth target of six per cent or less, down from the existing target of eight per cent.
Nicole Rogerson, CEO of Autism Awareness Australia, said the protracted negotiations had unsettled the autism community, which was anxious about what the proposed changes would ultimately mean for them.
She said “everybody needs to put on their big boy pants, and get on with it,” expressing frustration at the protracted talks.
According to Rogerson, the autism community is “so over this,” describing the process as akin to a rush to act followed by inaction — “hurry up, and then do nothing.”
She said she had warned in 2023 that tying the two issues together was problematic and that, even now, the situation remained deeply frustrating for families.
Growth cap remained another sticking point in the talks.
Another source of tension has been how much growth in public hospital activity the Commonwealth will fund, currently capped at 6.5 per cent a year.
In 2023, national cabinet agreed to replace that with a “more generous” model, and under the current offer the cap would be 10.25 per cent in the first year before settling at 8 per cent in the medium term.
Tensions remained high throughout the extended stoush.
For months, the Albanese government has been locked in strained, protracted talks on the next five‑year public hospital funding agreement, with the ABC revealing the Prime Minister wrote to premiers and chief ministers in September urging them to rein in hospital spending growth if they wanted a funding commitment made more than two years ago implemented.
There was also a push to finalise the deal before Friday’s meeting, with the South Australian government entering caretaker mode from February 21 ahead of the state election, narrowing the window for signing.
On Thursday, the Health Minister conceded that if an agreement was not secured by then, striking a deal before the one‑year interim funding agreement expires in June would be difficult, underscoring the tight timetable.
Tensions also flared before Christmas, when the Prime Minister was branded a “grinch” after adding $1 billion to the Commonwealth’s existing offer to lift its contribution by $20 billion over five years.
That offer included a further sweetener: an additional $2 billion over four years to address the increasingly political problem of aged care patients stuck in public hospital beds.
These patients are medically fit to leave but remain in hospital while waiting for a federally funded residential aged care bed.