Public health response to COVID-19

Budget Review 2020–21 Index

Amanda Biggs and Alex Grove

The Budget provides $93.8 billion for the health function in 2020–21 (p. 6-7), representing 14.0 per cent of total expenditure (Budget Strategy and Outlook: Budget Paper No. 1: 2020–21, p. 6-9). A priority is funding the ongoing health response to COVID-19 with commitments now totalling more than $16 billion. Funding for the COVID-19 response in this Budget is in addition to the $9.4 billion in health funding committed in the Economic and Fiscal Update released in July 2020 (p. 5).

The major components of the COVID-19 Response Package announced in this Budget total around $4.9 billion in new commitments (Budget Measures: Budget Paper No. 2: 2020–21, pp. 92–97). Other than the aged care and mental health responses (dealt with in separate Budget Review articles), the key measures comprise:

  • $1.9 billion over two years to secure access to two dedicated COVID-19 vaccines and related consumables, and to facilitate access to alternative vaccines that are being developed globally
  • $1.1 billion in 2020–21 to support the COVID-19 responses of public and private hospitals
  • $1.1 billion to support access to Medicare services including extension of temporary telehealth services, continued pathology testing and extending the operation of dedicated respiratory clinics and
  • $42.5 million to continue support for emergency measures including the National Incident Room, national communication activities and a central patient triage hotline.

More details are provided below.


The Budget includes $1.9 billion for access to COVID-19 vaccines, needles and syringes. $1.7 billion of this is for domestic manufacturing agreements for two vaccines currently in clinical trials: the University of Oxford/AstraZeneca vaccine and the University of Queensland/CSL vaccine. The agreements are for more than 84.8 million doses, with early access to 3.8 million doses of the University of Oxford/AstraZeneca vaccine expected in January and February 2021.

As noted by Prime Minister Morrison, there are ‘no guarantees that these vaccines will prove successful’, and ‘both vaccines would need to be proven safe and effective, and meet all necessary regulatory requirements, prior to being made available to the public’. However, the Government is planning to provide free access to a COVID-19 vaccine in 2021 if clinical trials prove successful. Because there are a number of other candidate vaccines currently in trials, the Budget also includes $123.2 million to join the COVID-19 Vaccines Global Access (COVAX) Facility. This initial investment means Australia is part of a purchasing mechanism and can receive offers to purchase other vaccines if they become available.

As noted in Budget Paper No. 1, how the pandemic will play out is ‘highly uncertain’ (p. 2-15). The Budget assumes that a vaccination program will be ‘fully in place by late 2021’ (p. 2-6), but Treasury has also considered an alternate ‘upside scenario’ in which there is ‘an earlier roll-out of a vaccine from 1 July 2021’ and an alternate ‘downside scenario’ in which rolling outbreaks necessitating severe containment measures continue until June 2022 (p. 2-15).


The Budget provides an additional $1.1 billion in funding to support public hospital activity during the COVID-19 pandemic (p. 97).

Public hospital services are jointly funded by the federal and state and territory governments under the National Health Reform Agreement (NHRA, as amended). The hospital response to the COVID-19 pandemic is guided by the National Partnership on COVID-19 Response which complements the NHRA and recognises the additional costs incurred by state and territory governments in managing and controlling the pandemic. The National Partnership Agreement, signed in March 2020, provides an upfront payment of $100 million to the states (paid on a population share basis) and specifies that the Australian Government will meet, through monthly payments, 50 per cent of the costs incurred by state governments in diagnosing and treating COVID-19 patients.

Under the National Partnership Agreement the states and territories entered into separate agreements with private hospitals in their jurisdictions to ensure they have access to sufficient hospital capacity (that is, beds and workforce) to meet higher demand for hospital services during the pandemic. The Australian Government has sought to ensure the on-going viability of private hospitals by agreeing to meet the cost to the sector of making private hospital beds and its workforce available to work with public hospitals in addressing COVID-19, underwriting the sector with a $1.7 billion private hospital guarantee (p. 56).

In addition, the Australian Government is supporting the states and territories to deliver public health activities associated with addressing the pandemic. This includes the cost of care outside of hospitals, paramedic services, personal protective equipment, community health services, staffing support in aged care, transport costs and minor capital expenditure. This brings their total commitment to the COVID-19 state and territory public health and hospitals response to $1.8 billion (p. 16).

The funding under these measures is in addition to NHRA funding for public hospital activity which totals almost $23.2 billion in 2020–21 (p. 16).


Access to essential medical services during the pandemic is being supported in the Budget through the extension of a number of temporary items on the Medicare Benefits Schedule (MBS) and related measures (pp. 95–96). It builds on the Guaranteeing Medicare and access to medicines measures in the Economic and Fiscal Update (pp. 134–5).


$111.6 million is provided to extend temporary Medicare-funded telehealth consultations to March 2021. Since March 2020, general practitioners (GPs), specialists, nurse practitioners, midwives and allied and mental health service providers have been able to offer video or phone consultations to patients in order to reduce the risk of spreading COVID-19. Generally, patients accessing GP telehealth services must have an established relationship with their GP or medical practice (that is, have visited face-to-face at least once in the previous year), although exemptions apply. As of 30 September 2020 32.8 million telehealth services had been accessed. Incentives for GPs to bulk bill telehealth consultations—meaning no out‑of‑pocket cost to the patient—ceased on 30 September. $18.6 million is provided to develop ICT systems to support telehealth services reform (p. 20).

Respiratory clinics and pathology

$711.7 million is provided to extend MBS pathology items for the detection of COVID-19, including among freight workers and aged care staff, for a further six months. $42.0 million is provided for dedicated pathology and collection centres in aged care facilities. More than 7.6 million COVID-19 tests have been conducted since the commencement of the pandemic (p. 22). Funding of $170.8 million is provided for dedicated GP-led respiratory clinics to continue operating to March 2021. These clinics operate as one-stop shops where patients can be isolated and tested for COVID-19, thus reducing the risk of community transmission. Funding for up to 100 respiratory clinics was initially provided in March 2020. By August, 146 clinics had been established and had undertaken more than half a million consultations.  

Emergency response

$42.5 million is provided for the continued operation of a number of emergency response measures (p. 92). This includes $15.4 million for the National Incident Room, $6.8 million for a centralised patient triage hotline, and $20.3 million for national communication activities related to COVID-19. Funding of $1.9 billion for the urgent procurement of emergency health equipment such as masks was provided under a number of Appropriation Acts in March and April 2020 (p. 56).

Stakeholder reaction

The peak doctors’ body, the Australian Medical Association, has commended a number of health measures including continued funding to support the COVID-19 response in hospitals, pathology testing services, GP respiratory clinics and temporary COVID-19 telehealth services, but warned that a safe, effective vaccine is not guaranteed for next year. The Rural Doctors Association of Australia also acknowledged the ‘significant investment’ in the COVID-19 response, including the expansion of telehealth items and respiratory clinics. The Australian Healthcare and Hospitals Association, representing public and not-for-profit hospitals, Primary Health Networks, and community and primary healthcare services, expressed disappointment that telehealth consultations were no longer required to be bulk billed and called for ‘long-term vision for these services in the interests of patients’. The Consumers Health Forum commended the Budget for giving ‘comfort that adequate provision has been made for the manufacture and supply of a COVID-19 vaccine should one become available’.


All online articles accessed October 2020

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