Australia: Federal budget - Healthcare announcements | March 2025

In brief

On 25 March 2025, the Australian Government delivered the 2025-26 Federal Budget. The Government announced major funding for Medicare, lowering the rates of medicines on the Pharmaceutical Benefits Scheme and improved affordability and accessibility to healthcare for women.

These proposals need to be passed through Parliament before they become law. While there is bipartisan agreement on certain proposals, these could be subject to change in the upcoming election, to be held in May 2025. Health policy is expected to be a prominent issue in the forthcoming election.

The Opposition has agreed to support the proposed spending measures on bulk billing and on price reductions for PBS scripts, but has not committed to support the rollout of 50 new Medicare Urgent Care Clinics.

All amounts are in Australian dollars.

The major funding commitments by the Government are set out below.


Contents

In depth

Aged care

AUD 291.6 million over five years to support the delivery of aged care reforms and recommendations from the Royal Commission into Aged Care Quality and Safety. Funding includes:

  • AUD 116.1 million in 2025-26 for the Aged Care Quality and Safety Commission to deliver its regulatory functions under the Aged Care Act 2024 from 1 July 2025.
  • AUD 53.2 million in 2025-26 to continue to implement the Single Assessment System and aid the digital implementation of the Aged Care Act 2024.
  • AUD 47.6 million over four years from to support First Nations organisations to deliver appropriate aged care assessments for First Nations people.
  • AUD 24.4 million in 2024-25 to provide additional Commonwealth Home Support Programme assessments.

The Government aims to achieve savings of AUD 27.7 million from 2025-26 under the new charging model of the Aged Care Quality and Safety Commission.

Education

AUD 606.3 million over four years to increase the supply of Australian doctors and nurses. Funding includes:

  • AUD 265.4 million over four years to expand general practitioner training through the Australian General Practice Training Program and the Remote Vocational Training Scheme. The goal is to create 200 new general practitioner training places each year from 2026, increasing to 400 from 2028.
  • AUD 248.7 million over four years to provide salary incentives for junior doctors to specialise in General Practice and to provide paid parental and study leave for junior general practitioners.
  • AUD 450 million over four years to create 100 new places in the Commonwealth Supported Places program per year starting from 2026.
  • AUD 44.0 million over four years to fund 200 new internship rotations in primary care.

The Department of Health and Aged Care will partially meet funding for these measures.

Medicare

AUD 8.5 billion to make 9 out of 10 visits to the GP free by 2030 (equivalent to AUD 18 million extra bulk-billed GP visits per year). Funding includes:

  • AUD 7.9 billion over four years to expand eligibility for bulk billing incentives to all Australians and introduce the new Bulk Billing Practice Incentive Program.
  • AUD 256 million over four years to introduce new, and amend existing items, on the Medicare Benefits Schedule (MBS).
  • AUD 74.9 million over four years for severe speech and language disorders to be added to the eligible disabilities under the MBS.
  • AUD 57.9 million over four years to provide faecal calprotectin tests to manage symptoms of inflammatory bowel disease.
  • AUD 43.6 million over four years to support the treatment of advanced neuroendocrine tumours.
  • AUD 228.7 million to modernise My Health Records and improve the digital health reform agenda.

In February, the Government announced this four-year AUD 8.5 billion investment into bulk billing incentives. This is the single largest investment in Medicare since its inception and is part of the Government's aspirational target for 90 per cent of all doctor visits to be "bulk billed" by the end of the decade, meaning there is no out of pocket payment by the patient. The opposition pledged to match this figure in full if the Coalition wins the election.

Mental health

AUD 46.0 million over four years to develop digital mental health services.

This is in addition to the AUD 588.5 million committed in the 2024-25 budget to establish a free national low intensity digital mental health service.

Medical facilities

AUD 657.9 million to fund the Medicare Urgent Care Clinics Program.

AUD 653.8 million over three years to add an additional 50 new Medicare Urgent Care Clinics spread across each state and territory bringing the total number to 137.

AUD 1.8 billion funding boost for public hospitals to reduce the wait times. This will complement the urgent care funding to reduce the pressure on the public hospital system.

Minimum wage

AUD 88.3 million over five years to fund the increase in minimum award wages of registered and enrolled nurses employed in the Aged Care Sector. Funding includes:

  • AUD 35.5 million over two years to fund historical leave provisions for Commonwealth-funded aged care providers.
  • AUD 30.1 million over five years to fund the Commonwealth Home Support Programme providers through an uplift in indexation to existing grant agreements to cover the cost of the increase in award wages.

AUD 2.5 billion over five years to meet the cost of the Fair Work Commission's decision for aged care nurses with funding to other aged care programs including residential aged care, the Home Care Packages program, and the Support at Home program.

National Disability Insurance Scheme (NDIS)

AUD 175.4 million over four years to safeguard the NDIS.

National Health Reform Agreement (NHRA)

AUD 33.9 billion in 2025-26 to extend the 2020-2025 Addendum of the National Health Reform Agreement to 2026. Funding includes:

  • AUD 32.2 billion in 2025-26 for Commonwealth funding under the NHRA.
  • AUD 1.8 billion to boost funding to public hospitals and related health services.

Pharmaceutical Benefits Scheme (PBS)

AUD 1.8 billion over five years for new and amended listings on the PBS.

AUD 784.6 million over four years to reduce the co-patient costs of medicines on the PBS.

If adopted, the price of medicines listed on the PBS will be capped at AUD 25 per prescription (down from AUD 31.50) with effect from January 2026. This would be the lowest cost for subsidised medications since 2004. The government would effectively cover part of the cost of most common prescription medicines.

Preventative health and sport

AUD 130 million in 2025-26 to improve preventative health outcomes and support other health initiatives. Funding includes:

  • AUD 107.8 million to improve the existing Public Dental Services for Adults funding agreement to 30 June 2026.
  • AUD 13.6 million to the New South Wales Government to expand the St George Illawarra Dragons Community and High Performance Centre, which aims to provide high performance and community sporting facilities for elite athlete pathways and community programs.

Women's health

AUD 792.9 million to improve accessibility and affordability of health care for women. Funding includes:

  • AUD 240.4 million over five years to support women's health outcomes.
  • AUD 134.3 million over four years to increase the cover for Long Acting Reversible Contraception (LARC) and to incentivise bulk billing for a LARC insertion or removal.
  • AUD 109.1 million over four years to run two national trials to make it easier for women to get contraceptives and treatment for uncomplicated urinary tract infections.
  • AUD 20.9 million over three years to support 33 Endometriosis and Pelvic Pain Clinics to provide specialist care.
  • AUD 26.4 million to improve Medicare rebates for menopause health assessments and to improve national guidelines for treatment.

The incentives aim to increase the use of LARC by offering increased medicare rebates.

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Authors: Ben McLaughlin and Madeleine Park.

  • Sources: Commonwealth of Australia; LexisNexis Capital Monitor; Australian Financial Review.

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