Labor Pledges Additional $1.7 Billion for Nation’s Public Hospitals, Concerns Over Longer Term Funding

Ambulances arrive at St Vincent's Hospital in Sydney, Australia, on Dec. 28, 2021. Jenny Evans/Getty Images

Labor Prime Minister Anthony Albanese has announced an extra $1.7 billion (US$1.1 billion) to address the ballooning cost of Australia’s public health system.

Each state will receive a proportion of this funding to help alleviate waiting times for surgery.

The federal government’s total contribution to state-run public hospitals will “increase by 12 percent” to $33.91 billion in 2025 to 2026.

New South Wales will receive an extra $407 million, Victoria $402 million, Queensland $414 million, and Western Australia $158 million.

Meanwhile, South Australia will receive $169 million, while Tasmania and the Australian Capital Territory will receive another $50 million, and the Northern Territory $51 million.

Albanese and Butler Say Funding Will Help Cut Wait Times

Prime Minister Albanese said the $1.7 billion funding boost for public hospitals would protect the public hospital system, and strengthen Medicare.

“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. This matters to people. And this decision today will help save lives and lead to better outcomes for our nation’s hospitals,” he said in a press conference.

Prime Minister Anthony Albanese speaks to media at Parliament House in Canberra, Australia, on Jan. 13, 2025. AAP Image/Dominic Giannini

Health and Aged Care Minister Mark Butler said that governments have been engaged in “trench warfare” playing the blame game on hospital funding.

“This infuriates Australians when all they want is to make sure they don’t spend hours ramped in an ambulance or waiting in an overcrowded emergency department,” he said.

Butler also noted there were 700 public hospitals in Australia employing half a million medical staff.

“We have a terrific public hospital system in Australia staffed by some of the best trained doctors, nurses, and health professionals anywhere on the planet. But it is a hospital system under very, very serious pressure.”

For context, in the 2024 financial year, state, local and federal governments spent over $61 billion on healthcare and social assistance staffing wages, according to the Australian Bureau of Statistics.

Coalition Says Labor Should Secure Longer-Term Agreement

Shadow minister for health, Senator Anne Ruston, was disappointed the government did not secure a longer term funding deal, and instead announced a “once-off, one year” funding band-aid.  a new five year national health reform agreement.

“The Coalition is seriously concerned by the uncertainty the prime minister has created for hospital funding going forward,” Ruston said in a statement, noting Labor should have made more headway with the medical unions.

Ruston said Australia’s hospitals were in crisis.

“Under Labor, it has never been harder or more expensive to see a doctor, which forced more than 1.5 million Australians in 2023-24 to avoid seeing their GP because they just could not afford it,” she said.

Australia’s current National Health Reform Agreement, which is between the federal government and all states and territories, is set to expire on June 30, 2025.

In the deal negotiated in May 2020, the federal Coalition government agreed to provide $133.6 billion between July 1, 2020 and June 30, 2025 for public hospitals.

Meanwhile, Deputy Leader of the Opposition Sussan Ley also raised concerns about the cost of seeing a GP under the Medicare system.

Ley claimed Australians were now covering 45 percent more of the cost to see a doctor from their own pocket.

“GP bulk-billing has fallen 11 percent under the Albanese government to 77 percent, whilst Australians are now paying the highest out-of-pocket costs on record,” she told Parliament on Feb. 5 (pdf).

Tasmania Says Funding Shortfall Still Exists

In response to the funding announcement, Liberal Tasmanian Premier Jeremy Rockliff welcomed the funding, but said his government still needed to find more than $300 million in additional funding.

“Federal funding for the Mersey [Community Hospital] was due to run out in 2027 and in the absence of a five-year agreement, I have ensured funding post 2027 will continue,” he said in a statement.

Rockliff said the state would continue to advocate for a “small state adjustment” to deal with the “unavoidable costs associated with being a smaller state,” an issue recognised by the federal government recognised.