Federal Budget 2025-2026: Healthcare snapshot

Medicare

The Federal Government continues to support Medicare, with expanded bulk billing incentives to all Australians and the creation of an additional new incentive payment for practices that bulk bill every patient. The Albanese Government is investing $7.9 billion so all Australians can see a GP for free.

Commentary: Further support for Medicare is welcome and making healthcare more affordable for ordinary Australians is commendable.

More Medicare Urgent Care Clinics

The Albanese Government is expanding the availability of free urgent care, with a $657.9 million commitment to open another 50 Medicare Urgent Care Clinics and expand existing services, with more clinics in every state and territory.

Commentary: Increase funding for urgent care clinics make sense and eases the burden on busy hospital ED departments.

Public hospitals

The Albanese Government is boosting funding to public hospitals, including an uplift for the Northern Territory, with an additional $1.8 billion to help states and territories to cut waiting lists, manage ramping, and reduce emergency department waiting times:

Commentary: Public hospitals remain under strain and continue to search for efficiencies, often including the use of technology. 

Women’s health

There are a number of initiatives in relation to women’s health. including new contraceptive pills added to the PBS, access to IUDs and birth control implants, and menopause treatments on the PBS.

Health workforce

The Albanese Labor Government is growing the health workforce with $662.6 million to deliver more doctors and nurses, including funding 2000 new GP trainees a year by 2028, salary incentives to encourage to train as GPs and scholarships for nurses and midwives to extend their skills and qualifications.

Commentary: Medical students often choose not to specialise in becoming GPs for work-life balance reasons. We question whether or not the incentive will change this.

There is a shortage of registered nurses in Australia and this will continue. Extra training for nurses is great; however, Australia needs more nurses on the ground, particularly with the ageing of its current nursing workforce.

The Government is investing $423.8 million to support people with disability. This includes $364.5 million to provide general supports for people with disability and their families, carers and kin. These supports will complement additional foundational supports to be co-funded with states and territories. 

The Government is also providing $42.2 million to deliver the National Autism Strategy and $17.1 million to establish the Accessible Australia program to increase inclusive public infrastructure. 

This funding builds on more than $3 billion of investment by this Government to improve the lives and safety of people with disability in Australia.

The Government continues to improve the NDIS to deliver better outcomes and ensure every dollar allocated to NDIS participants reaches them and is spent in a meaningful way that makes a difference in their lives. These reforms will help safeguard the sustainability of the NDIS, ensuring it can continue to support future generations of Australians.

Assistance to people with disabilities expenses are expected to increase over the period 2025-26 to 2028-29, reflecting an increase in the number of people with disability participating in the NDIS and increases in individual support costs, and continued growth in Disability Support Pension recipient numbers and average payment rates, along with the gradual resolution of the claims backlog.

Commentary: The Government has been working to reduce fraudulent NDIS claims and the sector has reported that the Government is becoming more stringent in assessing people as entitled to NDIS support.

The Albanese Government is providing cost of living relief to millions of Australians with $689.1 million to make cheaper medicines even cheaper.

From 1 January 2026, the maximum cost of a prescription for a Pharmaceutical Benefits Scheme (PBS) medicine will be cut from $31.60 to $25.

Pensioners and concession cardholders will continue to benefit from the freeze to the cost of their PBS medicines, with the cost frozen at its current level of $7.70 until 2030.

The Budget will continue to provide funding for the National Health and Medical Research Council (NHRMC), which provides research grants and $57,476,000 and $650 million for new medical research projects each year from 2024-25 forwards through the Medical Research Future Fund (MRFF). 

Commentary: It is great that the Federal Government continues to support health and medical research. It would be good to see more transparency on return on investment for this funding.

¹ For the three-month period ended Sep-24, 59 per cent of aged care homes operated at a loss (50 per cent for Sep-23) and 36 per cent operated at an EBITDA (cash loss) compared to 30 per cent for Sep-23. 
2025 01 Aged Care Financial Performance Survey Analysis Report

The FY24 results for the 74 organisations participating in this benchmark reveal an increasingly challenging financial environment. While operating revenue grew by 6.6 per cent to an average of $33.1 million, rising costs – particularly both indirect and direct staff costs – have significantly outpaced this growth. Total staff costs rose by 7.5 per cent, now consuming 81.5 per cent of operating revenue, up from 80.8 per cent in FY23. This trend, combined with a 7.0 per cent rise in total expenses, has increased the average operating loss to $1.18 million, compared to $1.0 million the previous year. 
2025 02 StewartBrown Disability Services Financial Benchmark (June 2024)

Sources:

Portfolio Budget Statements 2025–26: Budget Related Paper No. 1.9

Budget 2025–26: Health and Aged Care Portfolio Budget Statements