Greens Urge ACT Government to Scrap Health Levy Following Federal Funding Windfall
The ACT Greens have intensified their call for the territory government to abandon a contentious health levy imposed on ratepayers, following Canberra's successful negotiation of a substantial new Commonwealth hospital funding agreement. Deputy leader Jo Clay has labelled the flat fee a "Band-Aid" measure that must be removed entirely, arguing it exacerbates inequality during a cost-of-living crisis.
Levy Criticised as Inequitable Burden on Canberrans
Ms Clay, who also serves as the Greens' finance spokeswoman, stated that the health levy represents an unfair flat tax that disregards individual income or capacity to pay. "Flat fees on Canberrans - ignoring their income or capacity to pay - hurts our community," she emphasised. The Greens maintain that revenue should be raised from those most able to afford it, while simultaneously investing in preventative healthcare measures to alleviate pressure on the hospital system.
The party's stance carries significant political weight, as Labor requires Greens support to maintain government in the ACT Legislative Assembly.
Revised Levy and Payroll Tax Adjustments
Originally proposed in last year's ACT budget as a $250 annual charge on every rateable property for four years, the health levy was modified after tense negotiations with the Greens. The final agreement saw residential ratepayers face a reduced $100 yearly levy, while commercial properties remained subject to the full $250 charge.
This adjustment was part of a broader revenue package that included increasing the payroll tax rate to 8.75% for large businesses operating in the territory with national payrolls exceeding $150 million. While this change initially costs the budget $12 million in 2025-26, it is projected to deliver an additional $30.7 million over four years.
The original health levy would have generated $205.7 million across four years. The combined effect of the reduced levy and payroll tax increase is forecast to collect $236.4 million over the same period.
Commonwealth Funding Injection Changes Fiscal Landscape
The Greens' renewed push comes after the ACT secured an extra $557 million over five years through a new Commonwealth hospital funding deal. This agreement will inject $4.1 billion into the territory's health system over the next half-decade.
Additionally, Canberra obtained a further $150 million over the initial two years of the National Health Reform Agreement. This funding addresses the higher per-patient costs experienced in smaller jurisdictions, which were not adequately accounted for in previous arrangements.
ACT Treasurer Chris Steel acknowledged that the government would need to consider the health levy's future in light of the new Commonwealth agreement. "We said we would consider the revenue measures that we undertook in the last budget, and the health levy is one of those," Mr Steel stated.
Ongoing Health Funding Pressures Despite New Agreement
Health Minister Rachel Stephen-Smith cautioned that despite the substantial new funding commitments, pressures on the health budget would persist. "Nobody is pretending that those costs and those pressures are going to go away," she remarked last week, highlighting the need for continued efficiency improvements within the health system.
Mr Steel echoed this sentiment, noting that while the increased Commonwealth funding was welcome, the territory's additional $1.19 billion investment in health services over four years required sustainable funding sources.
The Treasurer indicated that the government faces multiple decisions regarding revenue measures in the upcoming June budget, including further stages of tax reform and commitments to reduce stamp duty.
Greens Advocate for Preventative Health Investment
Ms Clay argued that if the new health funding deal adequately addresses Canberra's needs, the government should confirm the levy's removal. She emphasised that Labor should prioritise investment in preventative healthcare, including access to general practitioners, healthy housing initiatives, and climate change mitigation actions.
"Labor needs to properly invest in preventative healthcare - which involves everything from access to GPs, to healthy homes and action to prevent worse climate change - to ease pressure on both the hospital system and the health budget," the Greens deputy leader asserted.
The debate over the health levy's future is expected to feature prominently in budget discussions leading to the mid-year ACT budget announcement.
