Anthony Albanese and state premiers have signed a $25bn deal to fund health and hospital services around the country, while agreeing to stem growth in the National Disability Insurance Scheme to 6% or less.
Friday’s meeting of national cabinet finalised the landmark agreement, after the federal government added an extra $2bn to its offer, bringing total federal spending for public hospitals to nearly $220bn over the next five years.
Premiers, chief ministers and the prime minister also agreed to delay the start of a new national program providing services to children with autism and other developmental delays to October, with full implementation due to commence from 1 January 2028.
Guardian Australia revealed this week the federal government had offered to delay the start of the Thriving Kids program by three months, in line with demands from state premiers and chief ministers.
The new program had been due to start on 1 July, but states said they were not ready to take responsibility for foundational supports for young children.
“These reforms will ensure that Australians can continue to access world-class health care as well as disability supports,” Albanese said after the meeting in Sydney.
“It prioritises investment in our precious public health system, and builds on my government’s commitment to strengthen Medicare.”
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As part of the deal, federal payments for hospitals will include $24.4bn through the National Health Reform Agreement, as well as more than $600m in further spending for the public system.
It comes on top of funding for 137 urgent care clinics and expanded access to bulk billing services, designed to take pressure off emergency rooms.
Health Minister Mark Butler and Albanese had initially offered $23bn in new funding, part of lengthy negotiations over plans for the federal share of hospital funding to grow to 42.5% by 2030 and reach a 45% share by 2035.
An extra $2bn in federal funding had been earmarked for speeding up hospital discharge for elderly people waiting for beds in aged care facilities.
The most recent estimate suggests more than 3,000 people are waiting to transfer from hospital wards to aged care.
The deal comes ahead of the start of the new financial year. The South Australian government is also about to enter a caretaker period next month, before the March state election.
Among additional sweeteners being offered before Friday’s meeting were budget funding “adjustments” to benefit smaller states, as they struggle with rising costs for health and hospital services.
Agreement on slowing NDIS growth
National cabinet agreed to “target” annual cost increases for the $50bn NDIS, to 5 to 6%, down from the current growth rate of about 9.5% last year.
The introduction of Thriving Kids has sparked concern among families who use the NDIS. Support services will be delivered through schools, health clinics and community facilities.
The federal government and the states agreed to finalise the national and local services to be delivered in each jurisdiction as part of Thriving Kids.
Friday’s agreement also stressed children with permanent and significant disability, including those with developmental delays or autism and who had high support needs, would continue to be eligible for the NDIS.
Children aged 8 who are enrolled in the NDIS prior to 1 January 2028 would be subject to the usual reassessment criteria, the agreement said.
Figures from May 2025 showed children under 15 made up 43% of the more than 717,000 participants enrolled on the NDIS, but just 13% of all payments. Participants who had autism or other developmental delays as their primary disability made up half of the scheme’s participants, but just 23% of total payments.