National cabinet strikes landmark deal on hospital funding and NDIS

State governments will get an extra $25 billion for their hospitals, the NDIS growth will be curtailed further and a new program for children with mild autism delayed under a new health funding deal.

After two years of negotiations, leaders agreed to the package at a national cabinet meeting in Sydney on Friday.

Overall, the Commonwealth will pour a record $219.6 billion into State and Territory hospital systems over the next five years.

Its funding will increase by 10.25 per cent in the first year of the deal and then 8 per cent annually after that.

Prime Minister Anthony Albanese lauded it as “one of the most significant national reforms in living memory” and thanked premiers and chief ministers for working to find common ground.

“It is a major step forward in addressing the pressures that are there on our health and aged care systems, as well as on the NDIS, ensuring their sustainability into the future,” he said.

His government upped its offer from the $23 billion extra that was on the table when health ministers met in December, talks that ended in stalemate despite the looming end of a one-year extension to the expired funding agreement.

WA will receive $2.4 billion of the extra Commonealth funding, burning the federal contribution to the State’s hospitals to $23.4 billion over the next five years.

Premier Roger Cook said the decision offered certainty over critical health funding matters.

“It is an acknowledgement by the Commonwealth of the challenges facing Western Australia’s health system, particularly in regards to aged care bed block in our hospitals,” he said.

“This cooperative spirit is a demonstration of WA’s close working relationship with the Albanese Government and our counterparts across Australia.”

Queensland’s David Crisafulli earlier in the week demanded Mr Albanese significantly increase the Federal Govenrment’s offer.

On Friday, he said he’d always like to see more but the agreement struck was “a really big step forward”.

Tasmanian Jeremy Rockliff said the premiers had “made a very robust case for further funding”.

However, they had acknowledged the new network of urgent care clinics - designed to ease pressure on emergency departments – was “playing out well for people within our respective states and territories”, he said.

Leaders also agreed to aim to cap the NDIS annual growth to 6 per cent – below the 8 per cent target decided in 2023.

As well, State contributions to the disability insurance scheme will escalate in line with its 8 per cent annual growth.

The new Thriving Kids program, which is yet to be clearly defined but will aim to provide supports outside the NDIS for the growing cohort of children with mild or moderate autism, will now start rolling out in October, rather than July as previously planned.

Mr Albanese said the States had proposed the delay and he agreed it was a reasonable request.

The fast-growing NDIS is one of the biggest pressures on the Federal budget and the government has been seeking to rein it in.

Shadow health minister Anne Ruston criticised the deal as coming two years too late and still lacking in detail.

“To make matters worse, young Australians living with a disability and their families remain in ongoing uncertainty due to the complete lack of clarity and detail around the new Thriving Kids program,” she said.