ACT Hospitals Secure Major Funding Injection in National $25 Billion Deal
Canberra's struggling public hospitals are set to receive a significant and long-awaited financial boost following a landmark agreement finalised by Prime Minister Anthony Albanese and state and territory leaders. The deal, inked during a national cabinet meeting in Sydney, will see Commonwealth spending on hospitals increase by $25 billion over the coming five years.
Details of the National Hospital Funding Agreement
The new national hospital funding agreement lifts total spending on Australia's public hospitals to $219.6 billion across the next five-year period. For the Australian Capital Territory specifically, this includes an additional $557 million in federal funding. This injection raises the Commonwealth's total five-year contribution to the ACT's public hospital system to $4.1 billion.
Prime Minister Albanese emphasised that the agreement prioritises investment in the public health system and builds upon his government's measures to strengthen Medicare. "It ensures that Australians can continue to access world class health care, as well as disability supports," Mr Albanese told reporters after the meeting.
Funding Tied to NDIS Reform Commitments
In a strategic move, the Prime Minister has directly tied the increased hospital funding to reforms of the National Disability Insurance Scheme (NDIS). In exchange for the substantial Commonwealth funding boost, premiers and chief ministers have agreed to collaborate with the federal government to cap the annual growth of the NDIS at 6 per cent or less.
This will be achieved by increasing state and territory funding for foundational disability supports. The negotiation follows a months-long stalemate where Mr Albanese linked higher hospital funding to NDIS changes, while jurisdictions pleaded for extra cash to meet rising health service demands and costs.
Addressing Canberra's Unique Healthcare Costs
ACT Health Minister Rachel Stephen-Smith has been a vocal advocate for additional funding, highlighting the high cost of providing care in Canberra without the "economies of scale" available in larger states. Data reveals that the ACT spends an average of $9,257 per episode of care in its public hospitals, which is 28 per cent higher than the benchmark used to set Commonwealth funding under the previous agreement.
Federal Health Minister Mark Butler noted that while jurisdictions were committed in principle to NDIS reforms, "the progress on delivering that commitment to families had drifted." He expressed confidence that all jurisdictions recognise the need to get the NDIS back on track to meet its original objectives of caring for people with significant and permanent disabilities.
Path to the Agreement and Political Context
The deal concludes protracted negotiations that began with national cabinet agreeing in 2023 to negotiate hospital funding and NDIS changes in tandem. Mr Butler stated ahead of Friday's finalisation that the federal government had put "a very generous offer on the table," with the $25 billion boost representing a significant increase on previous offers of $20 billion and $13 billion.
Public hospitals have been operating this year under the previous five-year deal, which rolled over after ending in June, supplemented by $1.7 billion in additional top-up funding announced before the May 2025 federal election. This included $50 million specifically for the ACT.
Prime Minister Albanese thanked the leaders for ensuring the focus remained on patients and the national interest. "The success of our Commonwealth has always been about finding common ground," he said, underscoring the collaborative effort behind this substantial healthcare investment.
