On Tuesday, 25 May, Treasurer Jim Chalmers delivered the 2025 Federal Budget. That morning, Chalmers positioned the upcoming federal election as “a referendum on Medicare,” reinforcing the government’s focus on healthcare. This focus was clearly reflected in the 2025 Budget, with a huge focus on delivering cheaper treatment and medicines to Australians.
Following a string of major healthcare announcements in recent weeks, not much new was left in the tank for the Treasurer to speak to, however he made important use of his address to remind the nation on Labor’s healthcare bona fides.
A total of $7.9 billion over 4 years has been allocated to incentivise general practices to become fully bulk-billing clinics. Eligibility for the bulk billing incentive will expand to cover all Australians, with the expectation that nine out of ten GP visits will be bulk billed by 2030.
Labor’s signature policy of Medicare Urgent Care Clinics recieved an update, with $657.9 million budgeted to establish 50 additional Clinics, bringing the total to 137 clinics nationwide. Once constructed, 4 in 5 Australians are expected to live within a 20-minute drive of a Medicare Urgent Care Clinic. In addition, Public hospitals and related health services will receive a $1.8 billion one-off funding boost.
Unsurprisingly, the Government’s health policy has been influenced by the cost-of-living crisis. A key budget measure includes a reduction in the PBS general patient co-payment, from $31.60 to $25.00, effective 1 January 2026. A key push by the Pharmacy Guild, this change will cost $784.6 million over four years and $236.4 million annually thereafter. It is expected to ease the financial burden of medicine costs on households.
An additional $1.8 billion will expand the Pharmaceutical Benefits Scheme (PBS) to include new medicines. Including:
To address workforce shortages, $606.3 million will expand GP training and provide incentives for junior doctors to enter general practice.
With the continuing shortage of intravenous (IV) fluids, $22.9 million will be invested over five years to tackle IV fluid shortages. This includes expanding domestic manufacturing, establishing a panel of suppliers and conducting a clinical review.
$46 million will be allocated over four years to support digital mental health services.
The government will establish the First Pharmaceutical Wholesalers Agreement with the National Pharmaceutical Services Association at a cost of $539.4 million over five years. This aims to ensure medicines remain accessible across Australia.
A further $150.3 million will extend and expand the Zero Childhood Cancer Precision Oncology Medicine Program (ZERO), the Precision Oncology Screening Platform Enabling Clinical Trials (PrOSPeCT) program, and the Australian Rare Cancers Portal (ARC Portal).
With healthcare funding forming the backbone of this year’s budget, the medical technology and pharmaceutical sectors stand to benefit from increased demand for innovative treatments and diagnostics.
However, pharmaceutical companies received a polite shot across the bow as part of the speech, with the Treasurer stating: “We are strengthening [the Pharmaceutical Benefits Scheme] because Australians need us to, not weakening it because American multinationals want us to.”
While it is in response to recent rumblings of Trump Administration potential attacks on the PBS, it serves as an important reminder of how the issue could spark a round of controversy in the midst of an election campaign.
As the government frames the upcoming election as a choice to protect Medicare and the Australian healthcare system, the 2025 Budget reinforces healthcare as a national priority. However, the budget leaves little room for election spending, with just $1.52 billion set aside in the ‘decisions taken but not yet announced’ category, significantly less than previous pre-election budgets.
With many big-ticket healthcare announcements in the budget and not much money left in the election pool, there is an opportunity to focus on low-cost initiatives and policies that can deliver a substantial impact. Communicating the value of these proposed commitments clearly to voters would further strengthen their appeal.
If you would like to know more about the 2025 Federal Budget and what it means for healthcare, please contact us to set up a briefing session.
To read the Department’s Health and Aged Care Portfolio Budget Statements, click here.
