Scott Morrison on a collision course with the states over hospital funding

NSW Health Minister Brad Hazzard declined to comment on the document brought forward by his state, but his Queensland counterpart Yvette D’ath joined the call for “long-term, sustainable health funding from the Commonwealth”.

Victorian Health Minister Martin Foley:

Victorian Health Minister Martin Foley: “We need a fit-for-purpose funding model.”Credit:Nine News

“We’ve written to the Commonwealth along with all the states and territories demanding a 50 percent health care contribution from the Morrison government,” Ms D’Ath said.

“We also want to see an extension of the current financial arrangements in the fight against COVID because the challenge the pandemic poses to Queensland is ongoing.”

“This includes providing aged care packages to the more than 500 Queenslanders who are currently in Queensland public hospital beds.

“The Morrison government needs to start taking its health responsibilities far more seriously.”

But federal Health Minister Greg Hunt hit back at the push for more money, arguing the federal contribution to health funding grew by 92 per cent between 2012-13 and 2020-21, compared with state increases of 44 per cent.

“There is nothing stopping the states and territories matching the Australian government investment in public hospitals and if they did, hospitals would be adequately funded,” a spokesman for Mr Hunt said.

Mr Hunt’s spokesman said the federal government had also “guaranteed funding to the states and territories over the last two years and provided them more than $ 500 million for delayed surgeries and hospital activity in recognition that this activity will need to be caught up at a future stage ”.

“We have also provided over $ 8.8 billion in additional hospital and health funding to states and territories to assist them in managing the health impacts of COVID-19.”


The push for a 50-50 share of hospital costs has the strong support of the Australian Medical Association, though President Omar Khorshid stressed an increase in federal funding should not allow states to pay less into the system.

“The reality is health care is more expensive because of COVID, which includes things like PPE and testing, and we are likely to be living with these costs for years,” he said.

“And then there is the cost of deferred care, the diagnostics, the surgeries that happen later. There’s an additional cost if cancer is detected and treated later, for example.

“We have not heard from Liberal or Labor any willingness to address this public hospital problem, neither Labor nor Liberal are willing to even have a conversation about public hospital funding.”

The AMA has estimated a move to 50-50 funding and the removal of the 6.5 per cent cap would cost the Commonwealth about $ 20.5 billion over four years. But Dr Khorshid said that money would help address “the huge pressure on the system”.


Health program director at the Grattan Institute Stephen Duckett said the “care deficit” – extra hospital costs linked to the pandemic – should legitimately be treated as “COVID costs”, and therefore the Commonwealth should stump up 50 per cent.

“So you could legitimately argue, in my view, that the Commonwealth should share [costs] 50-50 in 2022, and maybe even 2023, depending on how long it takes to mop up the care deficit, ”Professor Duckett said.

But Professor Duckett said there was also an argument for extra Commonwealth hospital funding on an ongoing basis, in addition to the removal of the 6.5 per cent funding cap.

“It seems to me that the states have got an argument for additional funding from the Commonwealth, either on the basis of COVID or ongoing,” he said.

Hospital funding arrangements between the states and the Commonwealth have been fraught for years. During the Rudd-Gillard era the Commonwealth agreed to lift funding to 50 per cent.

But that was detailed in 2014 when the Abbott government’s first budget linked hospital funding to population growth and general inflation.

Funding was then partially restored in 2016, with the Turnbull government agreeing the Commonwealth would pay 45 per cent of the cost of hospitals, subject to the 6.5 per cent funding growth cap.

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