Federal Budget 2026-2027: what healthcare leaders must respond to

Health care business leaders across Australia are digesting and responding to the 2026-27 Budget handed down by Treasurer Jim Chalmers last night.

The Australian Medical Association has welcomed additional funding for hospitals and Catholic Health Australia has backed investment in aged care.

Consumers Health Forum of Australia supports moves to address “out-of-pocket costs crushing Australians” but Dementia Australia says more must be done to tackle the leading cause of deaths.

Major NDIS overhaul 

An overhaul of the National Disability Insurance Scheme (NDIS) is the biggest saving in the Australian Government’s 2026-27 Budget.

It is reported the measures to “restore the NDIS to its original intent” will save $37.8 billion over the next four years.

The move was flagged in advance with around 160,000 people likely to be cut from the NDIS in order to support people “with permanent and significant disability”.

This will be done through fighting fraud and stopping rorts, slowing rapid costs increases, clearer eligibility requirements and delivering quality services and support to participants.

“Budgets are about choices,” Megan Spindler-Smith, Acting CEO of People with Disability Australia said.

This Budget chooses to directly cut the supports people with disability rely on to get out of bed, go to work, care for their children and participate in community life.

“You cannot build an inclusive community with budget savings that damage people with disabilities’ basic rights.”

Cash boost for urgent care clinics

Medicare Urgent Care Clinics have received $3.5 billion to become a permanent part of the health system giving free care every day of the week.

Reports suggest the free clinics have helped reduce presentations at hospital emergency departments by around 10 per cent.

The government says by the end of June, “four out of five Australians will live within a 20-minute drive of a Medicare urgent care Clinic”.

Consumers Health Forum CEO Dr Elizabeth Deveny welcomes the urgent care clinics funding, fewer repeat tests, and a commitment to focus on specialist fees.

Permanent funding for Urgent Care Clinics is an investment in accessible care, and one Australians need,” she said.

“We’ve been calling on the government to address specialist out-of-pocket costs for over ten years, so it is genuinely welcome to see this elevated as a national priority. 

“This crucial first step towards tackling unwarranted price variation in specialist costs is welcome and overdue.”

Call for “bigger uplift” in hospital funding

An additional $25 billion will be provided to public hospitals, including $24.4 billion through the 2026–31 National Health Reform Agreement (NHRA). 

Peak doctors organisation AMA Queensland President Nick Yim is reported saying: “We would have liked to have seen a bigger uplift to public hospital funding to reach 50/50 with the states.

Australians deserve proper investment in their public hospitals, no matter where they live, and the uplift has to come from Canberra.”

But Dr Yim welcomed $3.7 billion to deliver more services to older Australians, including 5000 extra aged care beds each year.

“We know bed block is a critical factor in long waiting lists for planned surgery in our public hospitals, and the more stranded patients we can get out of hospitals into more appropriate aged care arrangements, the better,” he said.

Subsidies for aged care providers

The Budget includes $3.7 billion for more older Australians to access residential aged care through two new building subsidies for providers. 

New homes will get $30 per supported resident per day and existing homes which have a significant expansion $15 per supported resident a day.

More people will be able to stay in their own homes, Support at Home delivered faster and waiting times reduced.

Catholic Health Australia backs the Federal Government’s investment in aged care, including faster access to Support at Home packages which bring down the wait list for those needing care.

The expansion of Support at Home packages is essential and tonight’s investment in accelerating packages is a good start,” Alex Lynch, Director of Aged Care at Catholic Health Australia, said.

“We have been calling for 60,000 additional packages to prevent 200,000 older Australians being left without care by mid-2027. 

“Every additional package funded means someone’s parent or grandparent getting the support they need to age at home with dignity,” 

Expansion planned for dementia program

The Hospital to Aged Care Dementia Support Program will also be expanded to 20 locations.

Dementia Australia Chief Executive Officer Professor Tanya Buchanan said: “It is vital the Commonwealth Government fully invests and implements the ten-year National Dementia Action Plan.

With two in three people with dementia thought to be living in the community, we must ensure funding extends to support all Australians of all ages, impacted by all forms of dementia, wherever they live.”

PBS receives extra funding

$6.5 billion will go towards cheaper medicines and the Budget includes $5.9 million for new and amended Pharmaceutical Benefits Scheme (PBS) listings.

The Budget says “since July 2022, the Australian Government has approved extra funding for 441 new and amended listings on the PBS. 

“This includes the introduction of 60-day prescriptions, freezing the concessional PBS co-payment to 2030 at $7.70, and reducing the general PBS co-payment to $25.”

Older people will have free access to protection against respiratory syncytial virus (RSV), a common respiratory virus that affects the nose, throat and lungs. 

The National Immunisation Program Vaccination in Pharmacy (NIPVIP) will expand and an enhanced childhood immunisation campaign will roll out. 

Children under 5 will be able to access vaccinations in pharmacies, and families will receive SMS reminders and targeted information to support higher vaccination rates. 

$589 million is to fast-track access to new medicines and increase investment in health and medical research through the Medical Research Future Fund (MRFF). 

Reforms to clinical trials will make it easier for patients, researchers and sponsors to find, conduct and participate in research. 

Thriving Kids program to be rolled out

The Thriving Kids program will be progressively rolled out from October for children eight and under with developmental delay and/or autism with low to moderate support needs.

A full rollout of services will be done by January 1, 2028 with $2 billion government funding over five years.

More First Nations mothers will be able to access Birthing on Country services with funding for “10 activities” delivered by or in partnership with Aboriginal Community Controlled Health Services (ACCHS). 

Six new fully-funded bulk billed GP clinics will be opened in New South Wales to put around 97 per cent of Australians within 20 minutes drive of a bulk billing doctor.

The government says almost 3800 Medicare Bulk Billing Practices are now registered and by 2030, nine out of every 10 GP services will be bulk billed.

Final thoughts