Health overview

Budget Resources

Amanda Biggs

Key figures and trends

Total spending on health in the 2023–24 Budget is estimated to be $106.5 billion, representing approximately 15.6% of the Australian Government’s total expenditure (Budget strategy and outlook: budget paper no. 1: 2023–24, p. 201). Table 1 shows health expenses by function.[BA(1] 

Table 1         Health function expenses, 2022–23 to 2026–27 ($ million)

Note: (e) = estimate. Totals may vary due to rounding.

Source: Australian Government, Budget Strategy and Outlook: Budget Paper no. 1: 2023-24, 210.

Budget paper no. 1 provides a breakdown of each function, briefly summarised below (pp. 210–212):

  • Medical services and benefits, comprised largely of Medicare and the Private Health Insurance Rebate, account for $39.3 billion in 2023–24.
    • Expenses for medical benefits are expected to increase over the forward estimates due to population growth, growth in use of medical services and high value items, and the ‘Strengthening Medicare’ measure (discussed in detail in the Budget review article on ‘Medicare’).
    • In 2022–23, Medicare benefit payments are expected to be $3.5 billion lower than forecast in the previous Budget, largely due to a reduction in demand for COVID-related activities (p. 106).
  • Pharmaceutical benefits and services, primarily comprised of subsidies for Pharmaceutical Benefits Scheme (PBS) medicines, is anticipated to be $18.2 billion in 2023–24.
    • While expenses are forecast to decrease in real terms by 7.0% over the forward estimates, primarily due to the impacts of existing pricing policies, it is important to note these estimates do not include new listings.
  • The Commonwealth’s contribution to the states and territories towards public hospital funding is estimated to be $28.4 billion in 2023–24.
  • Hospital services, mainly comprised of payments to the states and territories to deliver veterans’ hospital services, accounts for $999 million.
    • Expenditure is expected to increase over the forward estimates, mainly due to a return to pre-COVID-19 activity levels.
  • Health services, which include Government expenses towards the delivery of population health, mental health, blood and blood products, health infrastructure, medical research (including disbursements from the Medical Research Future Fund) and other allied health services, is expected to account for $13.2 billion in 2023–24.
    • Expenditure is expected to decrease over the forward estimates, largely due to the cessation of COVID-19 measures.
  • General administration, including health workforce measures, support for primary care and rural health initiatives, and general administrative costs, is estimated at $4.3 billion in 2023–24.
    • Expenses are expected to decrease due to the cessation of COVID-19 measures.
  • Aboriginal and Torres Strait Islander health, comprising the Health portfolio’s Indigenous-specific services, is estimated at $1.2 billion in 2023–24.
    • Expenses are expected to increase in nominal terms, but decrease in real terms over the period 2023–24 to 2026–27.
  • Average staffing levels for the Health portfolio agencies (including Sport and Aged Care agencies) will rise from 8,740 in 2022–23 to 9,564 in 2023–24 (Agency resourcing: budget paper 4: 2023–24, p. 159).

Significant policy measures

Selected significant health portfolio measures are outlined below. Measures around aged care, Medicare, Indigenous health, the National Disability Insurance Scheme and tobacco and vaping are covered in separate articles. The page references below refer to Budget measures: budget paper no. 2: 2023–24 unless otherwise indicated.

Reinvesting in health and aged care

  • The Budget includes a reinvestment of $1.7 billion over 4 years from 2023–24, with savings to be re-directed to a range of new or expanded health and aged care services (p. 146). Measures that benefit from the reinvestment include the establishment of a National Clinical Quality Registry Program (p. 140); dental funding (p. 138); the Royal Children’s Hospital Melbourne’s Good Friday Appeal (p. 132), preventive health (p. 143), reducing harm caused by alcohol and drugs (p. 144) and the Therapeutic Goods Administration (p. 153), among others. The Portfolio budget statements 2023–24: budget related paper no. 1.9: Health and Aged Care portfolio (Table 1.2, p. 33) outlines the programs that are providing the savings for this measure. Nearly half relate to ageing and aged care programs (see also the Budget review ‘Aged care’ article).

Reducing patient costs and improving services through community pharmacies; PBS medicines; immunisation

  • Savings of $1.3 billion over 4 years from 1 July 2023 will be achieved predominantly through changes to the maximum dispensing quantity for around 325 medicines (patients will be able to buy 2 months’ worth of medicines for the price of 1 month, reducing the dispensing fees paid to pharmacists), which will be introduced over 3 tranches from 1 September 2023. Savings will be reinvested, with $1.3 billion provided over 5 years from 2022–23 to reduce patient costs and improve access to medicines and related services delivered by community pharmacies. This includes $654.9 million for community pharmacy programs; $377.3 million to improve access to the Opioid Dependence Treatment program; $111.8 million for electronic-prescription delivery; $114.1 million for community pharmacies to deliver eligible vaccines; and $79.5 million to double the Regional Pharmacy Maintenance Allowance to support the ongoing viability of pharmacies due to reduced dispensing income (pp. 145–146).
  • $2.2 billion is provided over 5 years from 2022–23 for new and amended listings on the PBS, the Repatriation Pharmaceutical Benefits Scheme, the Life Saving Drugs Program, the National Epidermolysis Bullosa Dressing Scheme and the Stoma Appliance Scheme (p. 142).
  • $449.4 million is provided over 5 years from 2022–23 for new and amended listings on the National Immunisation Program, while efficiencies of $74.1 million over 4 years from 2023–24 will be delivered largely due to the recommended dose schedule for Gardasil®9 reducing from 2 to 1 for some patients (p. 141).

Mental health

  • $556.2 million over 5 years is provided to strengthen mental health and suicide prevention systems. $46.8 million in expenses will be partially offset by reducing funding from a 2018–19 budget measure ‘Prioritising mental health – aftercare following a suicide attempt’ and a 2021–22 budget measure ‘Mental health’ (pp. 139–140).

COVID-19 response

  • Additional funding is provided to continue the Government’s COVID-19 response, with most elements funded to 30 June 2024. This includes $757.4 million over 2 years from 2022–23 for continued access to a range of vaccine administration channels and $285.5 million over 2 years from 2022–23 in payments to the states related to testing and vaccination. Further COVID-19 treatment and vaccine purchases have been made, with financial implications not published due to commercial sensitivities. There are also some measures intended to support future preparedness, including a $43 million investment in ICT infrastructure (this also extends some existing programs) and $12.7 million to establish and maintain a GP-led Respiratory Clinic Panel that can be activated if needed in a health emergency (pp. 127–129).

Establishing an Australian Centre for Disease Control

  • $91.1 million over 2 years is provided from 2023–24 to progress the establishment of an Australian Centre for Disease Control, which was an election commitment. This is on top of $3.2 million allocated in the last Budget for initial design and consultation work (p. 131). See also the Budget reviewPublic sector’ [BA(3] article.

Reducing harm caused by alcohol and other drugs

  • In addition to expanding access to opioid dependence treatment, the Budget provides $33.6 million over 2 years from 2023–24 towards the extension of a range of Australian Government-funded alcohol and other drug treatment programs (p. 144).

Stakeholder reaction

Generally, the health budget has been positively received by stakeholders according to Croakey’s rolling coverage of initial reactions. However, some groups have expressed concerns. The National Rural Health Alliance has expressed disappointment that rural health reform was not addressed, while Suicide Prevention Australia believes the Budget has overlooked people in crisis. Pharmacists are concerned about the proposal that would extend the timeframe to dispense designated medicines from 30 days to 60 days’ supply. The Pharmacy Guild has warned some pharmacies may shut their doors or limit their services as a result of this measure.


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