Hospital funding deal rejected ‘in the firmest terms’
High-stakes hospital funding talks have failed to land a deal after tense negotiations in Brisbane, with states and territories saying the current offer is ‘not sufficient’.
Federal Health Minister Mark Butler says it will now be up to the premiers and Anthony Albanese to strike a national hospital funding deal after state ministers rejected the latest offer during high-stakes negotiations on Friday.
“We’d like to see an agreement by Christmas,” Mr Butler said, warning a deal is needed before South Australia goes into caretaker mode in February.
“All jurisdictions are eyes wide open that the runway is getting shorter and shorter for this deal.”
Health ministers met in Brisbane to work through sticking points that have prevented a deal from being reached after setting a self-imposed deadline of the end of the year.
“I hope there’ll be a meeting between now and Christmas that premiers and chief ministers attend with the Prime Minister to crunch this through,” Mr Butler said.
On Friday afternoon, Victorian Premier Jacinta Allan confirmed her government had officially rejected the offer.
“We do not accept the current offer from the federal government, and it’s not accepted because it’s not consistent with the agreement that was struck in December of 2023 on both health and disability investment,” she said.
“So we’ll continue to engage constructively. The negotiations are far from being finalised, and we’ll continue to engage constructively with both the federal government.”
The Australian understands a letter was also sent to the federal government from the Council of the Australian Federation, stating “CAF respectfully requests that the commonwealth improve its offer”.
State and territory health ministers continued to present a united front, releasing a statement saying the latest offer was below what had been originally pledged and was “not sufficient” and ministers remained “disappointed” by that.
“It will simply not address the growing pressure and demand felt by our hospitals and the dedicated workforce who care for Australians every day,” they said.
Queensland Health Minister Tim Nicholls said all state and territory ministers agreed.
“All of my colleagues here have rejected that offer,” he said. “It does not meet the needs of Australians, and that’s why it’s really important that today we were able to relay that message in the firmest terms possible to Minister Butler, so that he can take that back to the Prime Minister, and so that the commonwealth consider its obligation to provide that aged-care funding and that speed of access to NDIS funding that is lacking.”
ACT Health Minister Rachel Stephen-Smith said the commonwealth needed to up its offer.
“The bottom line is that two years ago, Anthony Albanese committed to growing the share of commonwealth funding for our hospital system, 42.5 per cent by 2030 and 45 per cent by 2035,” she said. “In the last two years, we’ve actually gone backwards in terms of the commonwealth contribution. So now we’re starting behind the eight-ball and that’s why we have said the current offer is not good enough.”
Earlier in the week, the federal government presented a renewed offer to first ministers, pledging $21bn over five years, an increase of $1bn compared to its previous offer.
Mr Butler said the government was also offering to increase the annual growth cap on its contribution from 6.5 per cent to around 8 per cent. The federal government insists its offers have been decent and made in good faith.
“Ultimately, this deal has to be landed,” Mr Butler said. “We have to get certainty. This is a very generous offer, but we need to move forward, not just on hospitals funding but some of the important disability reform issues that are covered by this complex negotiation as well.”
States and territories disagree the deal is adequate, saying what is on the table is not enough to make ends meet, especially given an expected rise in demand for services.
Mr Nicholls said the latest offer also included an additional $2bn “into assisting with the stranded patients issue”, which was welcome but did not go far enough.
“We do want to negotiate, and we’re very happy to talk to the commonwealth about what each state needs and what a reasonable contribution rate looks like, but it would require funding at a far higher rate each year to get there than is currently being put on the table,” he said
The Prime Minister on Thursday warned that the commonwealth had “other options” available if state leaders failed to engage in good faith.
“I hope it doesn’t come to that, because the states are working hard putting the options on the table, going back with the right questions, seeking answers,” Mr Nicholls said.
SA Health Minister Chris Picton said ministers has a good relationship with Mr Butler and their phone lines remained “open”.
“At the end of the day, it needs to be a fair deal that meets the needs of patients now and into the future. And unfortunately, we’re not there,” he said.
At the core of the arguments, much more important than the name-calling and swipes, is the reality that demand in Australia’s health system is expected to come under immense strain in coming years as the Baby Boomers start to turn 80. Many fear that strain will be sustained and the nation needs to be better prepared to cope.
To bolster their case, state and territory health ministers released the “National Aged Care Blockage Report Card” on Friday morning showing there has been a 26 per cent rise in aged-care patients languishing in public hospitals in the past three months, saying the national figure now exceeds 3000 people.
Mr Picton described the situation as “a national shame”, saying the bed block patients are people who are effectively homeless and stuck in hospital because they cannot get a federally funded aged-care bed. Likewise, Northern Territory Health Minister Steve Edgington raised concerns that patients were not receiving the “dignified” care they deserved.
Going into the meeting, Mr Butler cautioned he was not taking additional money and a deal would not be struck then. However, the meeting is designed to build the framework of the deal which would then be formalised by first ministers.
ADDITIONAL REPORTING: ANTHONY GALLOWAY, MACKENZIE SCOTT
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