Federal Budget May 2023-24: Health & aged care

This Budget prioritises funding for health and aged care, with a particular focus on reducing the cost of health care and medicines and improving the sustainability of the aged care system and NDIS. Key measures include tripling the bulk billing incentive, funding a 15% pay increase for aged care workers and increasing tobacco excise and customs duty by 5% per year for 3 years.

Reducing the cost of health care and medicine

The Government has committed $5.7 billion over 5 years from 2022–23 to improve access to affordable health care and medicine as an initial response to the Strengthening Medicare Taskforce Report delivered in December 2022. Key measures include:

$3.5 billion to triple the bulk billing incentive benefits for consultations for Commonwealth concession card holders and children under 16 years
$2.2 billion over 5 years from 2022–23 for new and amended listings on the Pharmaceutical Benefits Scheme, the Repatriation Pharmaceutical Benefits Scheme, the Life Saving Drugs Program, the National Epidermolysis Bullosa Dressing Scheme and the Stoma Appliance Scheme
an additional $445.1 million over 5 years from 2022–23 to increase funding for the Workforce Incentive Program–Practice Stream to support general practices in engaging multidisciplinary professionals such as nurses and allied health professionals
$429.0 million over two years from 2023–24 to modernise My Health Record including by creating a new National Repository platform to support easier, more secure data sharing across all health care settings
an additional $358.5 million over 5 years from 2022-23 to deliver Medicare Urgent Care Clinics, including 8 new clinics by the end of 2023, designed to reduce pressure on hospital emergency departments
$325.7 million over 4 years from 2023–24 to establish the Australian Digital Health Agency to deliver on the Government’s commitment to strengthen Medicare
$143.9 million for primary care after hours programs, including an extension to the Primary Health Networks after hours program to support general practices to fill access gaps
$99.1 million to establish a new MBS item for a longer consultation of 60 minutes or more to support improved access and affordability for patients with chronic conditions and complex needs.

Aged care initiatives

To improve the delivery of aged care services and support the sustainability of the aged care system, the Government has committed:

$515.0 million over 5 years from 2022–23 (and $956.9 million over 10 years from 2022–23) to fund the outcome of the Fair Work Commission’s decision to increase award wages by 15 per cent from 30 June 2023 for many aged care workers
$827.2 million over 5 years from 2022–23 to continue to improve the delivery of aged care services and respond to the Final Report of the Royal Commission into Aged Care Quality and Safety, including:
- $487.0 million over 4 years from 2023-24 to extend the Disability Support for Older Australians Program
- $112.0 million over 4 years from 2023–24 to introduce a new General Practice in Aged Care incentive payment to improve GP attendance and continuity of care in residential aged care homes
- $81.9 million over 3 years from 2023–24 to develop and implement a new Aged Care Act which is due to commence from 1 July 2024
an additional $591.3 million over 2 years from 2022–23 to continue the Government’s response to COVID-19 in aged care, including to reimburse aged care providers for additional costs incurred due to COVID-19 outbreaks and to extend access to PCR testing in residential aged care homes to 31 December 2023
an additional $338.7 million over 4 years from 2023–24 to improve the in-home aged care system including $166.8 million to provide an additional 9,500 Home Care Packages
an additional $309.9 million over 5 years from 2022–23 to implement the recommendations from the Royal Commission into Aged Care Quality and Safety, including:
- $139.9 million over 4 years from 2023–24 to improve the accountability and transparency of approved aged care providers through enhancements to the Star Rating system
- $72.3 million in 2023–24 to support the development and implementation of a new Aged Care Regulatory Framework to support the new Aged Care Act
$52.1 million to increase the funding available to aged care providers in very remote areas under the National Aboriginal and Torres Strait Islander Flexible Aged Care Program.

The Government will postpone the commencement of the Support at Home Program to 1 July 2025 in response to sector feedback that a longer lead time is needed, and extend grant arrangements for the Commonwealth Home Support Programme for a further 12 months to 30 June 2025.

National Disability Insurance Scheme

To improve the effectiveness and sustainability of the National Disability Insurance Scheme, the Government will provide $732.9 million over 4 years from 2023–24 towards NDIS, including:

$429.5 million over 4 years from 2023–24 to invest in the NDIA’s capability and systems
$73.4 million over 4 years from 2023–24 to better support participants to manage their plan within budget
$48.3 million over two years from 2023–24 to invest in the NDIA’s ability to detect, respond to, and reduce fraud and non-compliant payments.

The NDIS Financial Sustainability Framework will provide an annual growth target in the total costs of the NDIS of no more than 8% by 1 July 2026, with further moderation of growth as the NDIS matures. This is expected to moderate growth in NDIS costs by $622.8 million in 2026–27 and $59.0 billion over 7 years from 2027–28 to 2033–34.

Discouraging smoking and vaping

The Government will increase tobacco excise and excise-equivalent customs duty by 5% per year for 3 years from 1 September 2023, in addition to ordinary indexation. This measure is designed to reduce smoking and vaping rates and is estimated to increase receipts by $3.3 billion and increase GST payments to the states and territories by $290.0 million over the 5 years from 2022-23.

The Government will also align the tax treatment of tobacco products subject to the per kilogram excise and excise-equivalent customs duty (such as roll-your-own tobacco) with the manufactured per-stick rate, by progressively lowering the ‘equivalisation weight’ from 0.7 to 0.6 grams. These progressive decreases will occur on 1 September each year from 2023, with the new weight coming fully into effect from 1 September 2026. This will raise the per kilogram duty accordingly.

The Government will commit $511.1 million over 4 years from 2023-24 for a new national lung cancer screening program, nicotine vaping product regulation and reform, and cessation support activities for tobacco and vaping use.

Covid-19 response and planning for future public health emergencies

Additional funding will be provided over 5 years from 2022–23 to support long-term arrangements as part of Australia’s COVID-19 response such as expanding the COVID-19 vaccine strategy and providing Australians with COVID-19 treatments. Key measures include:

$757.4 million over 2 years from 2022–23 to ensure access to a range of vaccine administration channels such as community pharmacies
$285.5 million over two years from 2022–23 to provide states and territories 50% of the cost for PCR testing and agreed price per COVID-19 vaccination dose delivered for priority groups.

The Government has also committed $91.1 million over two years from 2023–24 to establish an Australian Centre for Disease Control, which will provide a national focal point for disease management to improve Australia’s ability to respond to health emergencies and other public health challenges.

Mental health

Key measures that are designed to strengthen the mental health system include:

$260.2 million for psychosocial supports, which help Australians with severe mental illness to recover and live in the community
$136.0 million to support the mental health of survivors of torture and trauma before moving to Australia on humanitarian grounds, and other culturally and linguistically diverse communities
$91.3 million to fund 500 additional psychology placements and training.