Last night, the Treasurer delivered the Australian Federal Budget for 2017-18. Below is a high level overview of the proposed changes announced in the healthcare area. Some of the measures require legislation to be passed through Parliament, which is not certain.

Proposed Changes 

In what the Government described as a A$10 billion re-investment in Australia’s healthcare over four years, last night's Budget lifts the freeze on the indexation of the Medical Benefits Schedule and reverses the removal of the bulk billing incentive for diagnostic imaging and pathology services and the increase in the PBS co-payment and related changes. The Government also announced its intention to legislate to establish a Medicare Guarantee Fund to pay for the Medical Benefits Schedule and the Pharmaceutical Benefits Scheme, and to raise the Medicare Levy to fully fund the National Disability Insurance Scheme.

National Disability Insurance Scheme (NDIS) funding

  • The Medicare Levy will rise to 2.5% from July 2019, raising A$7.8 billion over two years in an effort to fully fund the National Disability Insurance Scheme (NDIS). The 0.5% rise for all taxpayers, is forecast to raise A$3.55 billion in 2019-2010, and another A$4.25 billion the following year.
  • The Government will provide A$209 million to establish an independent NDIS Quality and Safeguards Commission to oversee the delivery of quality and safe services for NDIS participants.


  • The Government will establish the Medicare Guarantee Fund. The Fund will be credited with revenue raised from the Medicare levy (excluding amounts to meet the Government’s commitment to fund the National Disability Insurance Scheme) as well as a portion of personal income tax receipts sufficient to cover the estimated costs of essential healthcare provided under the Medicare Benefits Schedule (MBS) and Pharmaceutical Benefits Scheme (PBS).
  • The Government also announced that it will lift the freeze on the indexation of the Medicare Benefits Schedule, as well as reversing the removal of bulk-billing for diagnostic imaging and the increase in PBS co-payment and related charges. These changes will cost the Government A$2.2 billion over the next four years.
  • This will commence with General Practitioner (GP) bulk billing incentives from 1 July 2017, to ensure that GPs are incentivised to bulk bill children under the age of 16 and concession card holders.
  • From 1 July 2018, GP and specialist consultation items will be indexed, increasing the Government’s contribution to the cost of important healthcare services.
  • From 1 July 2019, specialist procedure and allied health items will be indexed and from 1 July 2020 certain diagnostic imaging items will be indexed for the first time since 2004.

Pharmaceutical Benefits Scheme

  • In this Budget, $1.2 billion will be provided for new and amended listings on the PBS.
  • The Government will seek to reduce the price it pays for subsidised medicines to achieve savings of $1.8 billion over five years.

Mental health

  • The Government will commit A$170 million for mental health support, treatment and research, including:
    • A$80 million of additional funding to maintain community psychosocial services for people with mental illness who do not qualify for assistance through the NDIS.
    • a new A$9.1 million telehealth initiative to provide rural and remote communities with improved access to psychologists.
    • A$11.1 million to prevent suicide in identified hotspots where suicide incidents repeatedly occur.
    • A$15 million will be provided for three major mental health research initiatives at Orygen, the Black Dog Institute and the Thompson Institute.

Preventative health

  • The Government will provide A$19.6 million to support the No Jab No Pay vaccination policy including a new A$5.5 million immunisation awareness campaign and A$14.1 million to expand the National Immunisation Plan to provide catch up vaccinations to 10 to 19 year olds who missed out on essential childhood vaccinations.
  • The Government will invest over A$230 million in cancer screening and research including:
    • A$10.8 million to fight childhood cancer. This includes A$1.4 million for pediatric brain cancer clinical trials and A$4.4 million for Cancer Australia.
    • A$41.6 million to extend an agreement for the Victorian Cytology Service to continue research and quality services for cervical cancer screening.
    • A$64.3 million to continue mammogram screening for women from 70 to 74 years of age, in addition to women aged 50 to 69 years of age receiving screening services through the BreastScreen Australia program.
    • an additional A$5.9 million to fund an increase in the number of prostate cancer nurses.
  • The Government will commit A$145.5 million to Primary Healthcare Networks to continue their work giving local communities access to after-hours medical care at home.

Medical Research Future Fund (MRFF)

  • A$1.4 billion will be allocated under the MRFF by 2020-21 – including A$640 million in 2020-21 - in medical research funding.
  • CanTeen will receive A$5 million to support clinical trials in adolescents and young adults.
  • A$65.9 million will be immediately shared by eight research projects, including trialling new drugs, devices and services, clinical fellowships, and projects to address childhood obesity.
  • Other projects include developing pandemic vaccines, tackling antimicrobial resistance, and supporting cutting edge ideas and the next generation of researchers.

Public hospitals

  • Commonwealth funding to states and territories will increase by A$2.8 billion with total hospital funding to increase from A$18.5 billion in the current year to $22.7 billion in 2020-21.
  • The Tasmanian Government will receive $730.4 million to fund the Mersey Community Hospital for the coming decade and a further A$6.2 million to support the continued operation of the Missiondale Recovery Centre and palliative care services.

Aged Care

  • The Budget includes A$5.5 billion for the continuation of the funding arrangements for the Commonwealth Home Support Programme over two years from 1 July 2018, including contributions for essential home support services.

Dental care

  • Families eligible for the Government's Child Dental Scheme will get an extra A$300 to spend on dental care every two years with the amount families can spend on dental check ups, fillings and other basic dental work every two years will rise from A$700 to A$1,000 as a result.


  • The Government has committed A$374 million to provide all Australians with an electronic health record by default. Under the My Health Record scheme patients will now have to opt-out rather than opt-in if they do not want their health record included in the scheme.
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