The Albanese government seeks to prove its commitment to Medicare before the upcoming election – while holding out on a fresh five-year deal with the states.
The Albanese government seeks to prove its commitment to Medicare before the upcoming election – while holding out on a fresh five-year deal with the states.
By Natassia Chrysanthos
Updated February 5, 2025 — 2.13pmfirst published at 2.09pm
Australia’s public hospitals will get $1.7 billion more from federal coffers in the next year as Labor seeks to prove its commitment to Medicare before the election while holding out on a fresh five-year deal with states.
Prime Minister Anthony Albanese on Wednesday said it represented a 12 per cent boost while Health Minister Mark Butler said it would help hospitals address strong wage pressure in the system, including in NSW where more than 50 psychiatrists have resigned over a wage dispute with the state government.
Hospital costs are rising due to wage growth, an ageing population, more complex disease profiles and the continuing impacts of COVID-19. People using the public system have faced ballooning elective surgery waitlists, long emergency department wait times and ambulance ramping.
“This funding will be delivered to states and territories to help cut waiting lists, to reduce waiting times in emergency rooms, and to manage ramping,” Albanese said.
“This matters to people, and this decision today will help save lives and lead to better outcomes for our nation’s hospitals.”
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Butler also used Wednesday’s announcement to sharpen his attack on the Coalition’s health record as Labor uses Medicare to pitch itself to voters at the federal election.
“There could not be a clearer difference between this prime minister’s approach to ensuring the Commonwealth is a reliable partner in the operation of this core part of the Medicare system, and the approach that Peter Dutton had when he was the health minister,” Butler said.
“Instead of digging in and making sure that his government was a reliable partner, he tried to walk away from funding agreements that had been struck by prime minister [Julia] Gillard with state and territory governments, Liberal and Labor alike, and cut $50 billion from Commonwealth funding – something that the liberal premier, Mike Baird, then described as a ‘kick in the guts’.”
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But the next five-year hospital funding agreement with states, which was due this year, has been pushed out beyond the federal election, as the West Australian government enters caretaker mode before its state election.
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The Commonwealth has also mandated that ongoing hospital funding for states will be conditional on them coming to the table on a “foundational support” system for Australians with disabilities to get help outside the NDIS, which has not yet been implemented.
“The Commonwealth’s very satisfied with progress on NDIS rule reform and also the development of foundational supports,” Butler said.
“But states and territories understand that the conclusion of a five-year deal – which is what they’re after and what was committed by the prime minister at the national cabinet meeting in December 2023 – remains tied to that NDIS reform process continuing as it would.”
One of the persistent sticking points in negotiations for state premiers has been their desire to abolish the 6.5 per cent funding growth cap that exists on Commonwealth payments to hospitals.
Butler said it was important a funding cap remained in place to give the federal government cover and make sure states delivered their services efficiently, but that Wednesday’s 12 per cent top-up was a concession that the current arrangement wasn’t fit for purpose.
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Natassia Chrysanthos is a federal politics reporter for The Sydney Morning Herald and The Age, reporting on immigration, social issues and the NDIS from Parliament House in Canberra.Connect via Twitter or email.
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