Analysis of the Federal Budget for health and aged care

What's in it for healthcare, aged care and hospitals?

The Macquarie University Centre for the Health Economy (MUCHE) Health Report 2022 is the most comprehensive analysis of Federal Budget announcements for health and aged care. Released today, the report provides insights on what is included and what is missing, covering aged care, hospitals, mental health, pharmaceuticals, pharmacy, primary care, private health insurance and vaccines.

A copy of the report is available here.

“Health portfolio funding has reduced by $5.7 billion in 2022-23. There are no big-ticket reform announcements, instead lots of smaller funding allocations targeted at specific groups and programs. Our healthcare system is still in urgent need of reform,” says Professor Henry Cutler, Inaugural Director, MUCHE, and lead author of the report.

This report is produced annually by specialist health economists at MUCHE, an applied research centre focused on investigating the Australian health, ageing and disability sectors at the macro level, with a particular focus on the interdependencies of the systems with each other, and the broader community. Research and analysis from MUCHE help to inform public debate and assists government and business decision-making.

At the beginning of 2022, MUCHE joined the Australian Institute of Health Innovation as its fourth university research centre, forming the largest health services research entity in Australia and one of the largest of its kind in the world.

In summary, the report highlights:

Health portfolio funding will be reduced by $5.7 billion in 2022-23 compared to 2021-22, equating to a nominal 5.1 per cent cut. But this represents a real reduction of 7.5 per cent once health inflation and population growth are considered.
Funding will be tighter in 2023-24 - with a further $3.2 billion reduction.
Aged care received more funding - mostly to battle COVID-19. But needs an additional $5 billion annually (from somewhere, not just Government) to meet quality expectations
Public hospitals are heading further into crisis with COVID-19 blowing out elective surgery waiting lists. Around 11 per cent of public patients in NSW waited more than 365 days in 2020-21.
The Budget increased mental health care spending but not enough to expand the mental health workforce or tackle the structural change needed
In good news, the Government will further embed pharmacists into the health and aged care sectors.
The private health insurance rebate continues to drain the Health portfolio budget. It cost nearly $7 billion this year and is forecast to cost a further $29 billion over the next four years. The Department of Health is reviewing the rebate and Medicare Levy Surcharge – although abolishing the rebate seems off the table. This is despite any evidence it provides a sufficient return on investment.

Professor Cutler was quoted in the Sydney Morning Herald : Aged care staffing budget hole, nurses shortage to weigh on new government, Saturday 2 April 2022.

Centres related to this news

Macquarie University Centre for the Health Economy

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Chrissy Clay, Media and Research Outreach Coordinator

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