The 2026 federal budget: What healthcare business leaders should be watching

Health care business leaders are being given a taste of what will be served up in Tuesday’s Federal Budget. Here’s what we know so far. 

Against a backdrop of persistent inflation, rising operating costs and mounting workforce pressures across the healthcare sector, Treasurer Jim Chalmers will hand down the 2026–27 Federal Budget on 12 May 2026, with healthcare business leaders watching closely for measures that could ease pressure on an already strained system.

Treasurer Jim Chalmers has recently described the budget as both “ambitious” and “very responsible”, with health care high on the agenda.

NDIS reforms set to reshape disability sector

Changes to the NDIS have been announced with around 160,000 people expected to be cut from the scheme in the next four years.

The government says it is “returning the NDIS to its original intent” by “fighting fraud and stopping rorts; slowing rapid cost increases, clearer eligibility and delivering quality services and support to participants”.

The NDIS was established to support people with permanent and significant disability, but its scope has expanded to cover many Australians with less significant support needs,” says the government website.

“In line with the original intent of the NDIS, access will be based on a significant reduction in a person’s functional capacity that impacts their day-to-day living.”

This will be done by changing the eligibility criteria and is expected to save billions of dollars. However, registration will become mandatory for all NDIS service providers.

It has been reported the changes will have an impact on businesses delivering NDIS services.

Health Minister Mark Butler has also already announced a package which will deliver an additional 5000 residential aged care beds a year.

Aged care funding in focus

The package also includes new targeted capital subsidies for residential aged care, providing additional funding for supported residents for newly built or refurbished homes. More than $200 million for 20 additional Specialist Dementia Care Program units and an expansion of the Hospital to Aged Care Dementia Support Program.

“Showering, dressing, continence care – these aren’t optional extras. They’re the basics of ageing with dignity, and no older Australian should miss out because of cost,” Minister for Aged Care and Seniors Sam Rae said. 

“Older Australians, their families and providers told us these services needed to be protected. We’ve listened, and we’re acting.”

Hospitals, Medicare and urgent care clinics 

There are also reports of $25 billion for new hospitals over the next five years and $1.8 billion over the same period (with $525.6m from 2030-31) to make Medicare Urgent Care Clinics permanent.

The walk-in and bulk-billed urgent care clinics have been described by Prime Minister Anthony Albanese as “good for wallets, good for health, and are taking pressure off local emergency departments”.

Some claim the clinics are a far more costly service and the Royal College of Australian General Practitioners says the “value in addressing Australia’s patient care challenges remains unclear”.

Private health insurance changes could impact demand

Age-based loading for the private health insurance rebate will also be removed in next week’s Budget which will see a rise in costs for millions of people over the age of 65.

Canstar reports “older Australians could pay up to $410 more a year for top health cover under proposed cuts to the private health insurance rebate”.

The government last week announced plans to reduce the private health insurance discount by 4 percentage points for those aged 65-69 and by 8 percentage points for those aged 70 and over,” Canstar said in a Budget preview.

Aged care organisations will also be keeping a close eye on announcements around Support at Home funding, dementia care, hospital-to-aged-care pathways, access and wait times.

Among the Australian Medical Association’s (AMA) pre-budget submissions were modernise Medicare, redesign GP consultation, increase funding for GP-led team-based care and make it easier for patients to access GP care outside normal hours.

SMEs brace for tax and compliance changes

Outside healthcare-specific measures, business owners are also preparing for possible tax reforms and broader economic changes:

• First reforms to the country’s capital gains tax in 27 years expected, with the 50 per cent CGT discount to be reduced or replaced.
• Recipients of small and family business trusts may face new taxes with a new 30 per cent baseline tax rate tipped to be announced.
• Businesses may be able to claim losses back against previous years’ profits  which can lead to tax rebates.
• Permanent instant asset write-off extension could allow small businesses to continue claiming a tax deduction for eligible purchases of $20,000 or less.

Professional accounting body CPA Australia is also calling for the government to “reduce regulations, improve public finances and support SMEs (Small and Medium Enterprises) and NFPs (not-for-profit)”.

Negative gearing concessions are tipped to be cut, questions remain over whether fuel excise, halved two months ago will be extended but the electric vehicle tax break will be reduced to encourage discounts from dealers.

Other key measures

Defence spending is expected to be announced at $53 billion over the next 10 years, mirroring moves from countries around the world.

With concerns over global fuel supplies, due to the Iran war, the Australian Government is launching a $10.7 billion plan to secure fuel and fertiliser supplies.

It is also being reported, but not confirmed, that a one-off payment of between $200-$300 will be made to all Australian wage earners.

While many of the measures remain subject to confirmation on Budget night, healthcare leaders are already preparing for another year of balancing rising costs, workforce shortages and regulatory change.

Key takeaways

For businesses across aged care, primary care, disability and private health, this Budget may offer early signals about where pressure will ease, where scrutiny will increase, and where future investment opportunities may emerge.