Hobart Clinic secures $2m lifeline to stay open amid closure threat

Tasmania's government has thrown a $2m lifeline to keep the Hobart Clinic open, but the private mental health facility must prove it can survive without public funding after six months.

Health minister Bridget Archer speaks to the media at the Executive Building in Hobart on Tuesday, October 14, 2025.

The state government has offered $2m to the operators of the Hobart Clinic to keep the private mental health facility operating for another six months.

The 27-bed clinic was to close by the end of October due to an expected deficit of $3m this financial year.

Minister for Health, Mental Health and Wellbeing Bridget Archer announced the one-off business support grant on Tuesday.

She said it was intended to provide the Clinic with time to work on changes to its business model and establish if it could operate sustainably without public funding in future.

“This investment will allow The Hobart Clinic to keep the doors open for six months, giving them time to work through their operating model and ascertain if the business can be viable into the future,” Mrs Archer said.

“After six months, The Hobart Clinic must be able to demonstrate they can operate without government assistance, as no further government funding will be available.

“I have communicated this to The Hobart Clinic Chair today and look forward to their prompt agreement, which will enable a Deed to be finalised as soon as possible.

“The government will also continue working with other private providers to ensure the mental health needs of Tasmanians can be met in the private system into the future.”

The funding comes on top of $7m already provided in recent years, Mrs Archer said.

The announcement came shortly after the Health and Community Services Union delivered a petition for government action to save the clinic with 3500 signatures.

HACSU state secretary Robbie Moore and Hobart Clinic nurse Leah Ludbey speak to the media at parliament Square in Hobart on Tuesday, October 14, 2025.

The union’s state secretary Robbie Moore said certainty was needed for both staff and patients at the clinic.

“If this clinic closes, it will put lives at risk, and it will mean that people are missing out on vital services that the clinic does,” he said.

“It will cost the government a very minimal amount, and it will save money for the government because if this clinic closes, it will be the Royal Hobart Hospital that has to pay overtime to nurses, to locum doctors to paramedics that are ramped at the hospital.

“They’ll be paying overtime that will cost way more than $2m so this will actually save the state government money by keeping the clinic open.”

Australian Medical Association state president Michael Lumsden-Steel said the decision was wise.

“This funding is a vital and very welcome step to ensure Southern Tasmania does not lose all of its private inpatient psychiatry capacity,” Dr Lumsden-Steel said.

“The Hobart Clinic provides critical mental health care for the South, and its closure would have left patients without access to private inpatient treatment anywhere in the region.

“The government’s decision recognises that this is not simply a private sector issue — if these beds had closed, acutely unwell patients would have ended up in the Royal Hobart Hospital emergency department, which is already stretched beyond capacity.