Labor’s one-off funding a band aid for public hospitals while private sector left in limbo

The Federal Government has committed a one-off funding boost of $1.7 billion to public hospitals under a one-year extension to the National Health Reform Agreement (NHRA). However, the deal remains contingent on the outcome of the federal election, with the possibility of a new government withdrawing the funds.

Prime Minister Anthony Albanese framed the 12% funding injection, which raises the Commonwealth’s total contribution to state-run public hospitals to $33.91 billion, as a safeguard against past cuts under the Coalition.

“Our public health system is too precious to entrust to Peter Dutton and the Liberals, who ripped $50 billion out of public hospital funding when he was Health Minister,” he said.

Health Minister Mark Butler echoed the sentiment, condemning the history of political deadlock on hospital funding.

“For too long we’ve seen governments stuck 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. “The choice facing Australians at the coming election couldn’t be clearer: an Albanese Government committing more funding to public hospitals, or more cuts from Peter Dutton, who cut $50 billion from public hospitals when he was Health Minister.”

Despite government assurances, the long-term future of hospital funding remains uncertain. With this funding arrangement only locked in for 2025-26, a new NHRA five-year agreement will need to be negotiated after the next election. However, progress is tied to broader negotiations on National Disability Insurance Scheme (NDIS) reform, further complicating the outlook.

Gerard Hayes, National President of the Health Services Union (HSU), acknowledged the immediate benefit to public hospitals but stressed the need for a long-term solution.

“While this is an important announcement, we’ll take a close look at the details to ensure it delivers for health workers. A new five-year funding arrangement must be a top priority for the Prime Minister and his state and territory counterparts later this year,” he emphasised.

The opposition, meanwhile, slammed Labor’s handling of the negotiations. Shadow Health Minister Anne Ruston accused the government of failing to secure a long-term NHRA deal.

“It is so disappointing that the Albanese Labor Government has failed to negotiate a new five-year National Health Reform Agreement, while also creating a possible multi-billion-dollar black hole in the process,” she stated.

“The Coalition is seriously concerned by the uncertainty the Prime Minister has created for hospital funding going forward and the Prime Minister’s lack of negotiating skills. 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. This is only putting further pressure on hospitals, at a time when they need this government’s support.”

A major sticking point in the NHRA negotiations has been the 6.5% funding cap on Commonwealth hospital payments, which state premiers want abolished. Minister Butler defended the cap, arguing it was necessary to ensure states delivered services efficiently. However, the 12% top-up is an admission that the current funding model is flawed.

While the government touted its commitment to public hospitals, private hospitals remain sidelined. CEO of the Australian Private Hospitals Association (APHA), Brett Heffernan, accused the government of ignoring a sector that plays a critical role in Australia’s healthcare system.

“Private hospitals are doing much of the heavy-lifting when it comes to hospital care,” he said. “Private hospitals receive no government funding. It hardly seems like a ‘balanced healthcare system.’”

Private hospitals have fiercely criticised what they see as Labor’s piecemeal approach to reform, arguing that the government continues to neglect the sector’s viability issues.

“That the federal election is likely to be called well before the next scheduled meeting of the CEO Forum speaks volumes to the indifference the government has to the crisis endured by private hospitals, their patients and employees for two long years,” Heffernan warned.

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