Crunch time for hospital funding deal as deadline looms
As the clock ticks for the country’s leaders to reach a deal, doctors warn hospital funding must be stepped up to shorten waiting lists.
Prime Minister Anthony Albanese will meet state and territory leaders in Sydney on Friday as the federal government seeks to seal a new five-year hospital funding deal.
The national cabinet meeting will also discuss efforts to rein in runaway spending on the National Disability Insurance Scheme.
Mr Albanese hosted a dinner in Kirribilli for prime ministers and chief ministers on Thursday evening ahead of official talks.
The South Australian government will enter caretaker mode a month after the March 21 state election; This means that if a deal isn’t reached soon, there won’t be time to introduce anything new by July 1.
Failure to secure a financing agreement will likely require another one-year rollover arrangement.
The Albanian government in December offered public hospitals $23 billion over five years; $2 billion of this proposal is to help states manage elderly patients who become frail while waiting for aged care beds in hospitals.
One in 10 public hospital beds in Australia are used by stranded patients requiring alternative accommodation in aged care and disability support, according to an independent report published in 2025.
Health Minister Mark Butler described the offer in December as “generous” and said the Commonwealth was approaching the negotiations in good faith.
But states and territories have insisted the federal government stick to the 2023 deal, which sees the Commonwealth increase its share of public hospital funding to 42.5 per cent by 2030 and 45 per cent by 2035.
The actual share of Commonwealth funding appears to be well below these targets.
On Thursday, Mr Albanese highlighted health commitments already made by the federal government, such as tripling the bulk billing incentive.
“We are not an ATM,” Mr Albanese told reporters in Cairns.
“We need to make sure we act responsibly going forward. We understand that some state budgets are also under pressure.”
Queensland Premier David Crisafulli this week called for a better deal and said he would not sign a deal if the offer to the states did not adequately address the issue of stranded aged care patients.
His South Australian counterpart Peter Malinauskas said the states might agree to the deal if the offer was lifted enough to keep the Commonwealth share tracking towards the 42.5 per cent figure.
Australian Medical Association president Danielle McMullen said funding for hospitals could not be left on “autopilot”.
“More funding to ‘just keep up the pace’ will not reduce waiting lists… detailed information is what matters in hospital funding,” he said.
“It’s not fair or honest to compare what you’ll pay in the next five years to the last five years because the reality is that costs are going up, our population is growing, and care is getting more complex.”
Dr McMullen called for an increase of up to $40 billion to bring the federal government’s contribution to 45 per cent of hospital funding by 2030.
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