Like it or not, the federal government is going to have to concede some ground on its insurance rebate cuts. Could be worse. Could be NSW Health.
This column was going to be all about the knots the federal ministers for health and aged care tied themselves in this week. But then NSW Health lost its mind.
In a week when the NSW government committed $28 million to the continuing war with the feds over stranded aged care patients in its public hospitals, and it was revealed that not only was there a $790 million annual shortfall in mental health funding, but that NSW Health was warned not to damage its rep by revealing that shortfall, the department also chose to cut staff.
I say “cut staff” – it’s called for volunteers for a euphemistically titled “optional realignment program” – but it’s basically an admission that the government, at least, believes there are too many non-patient-facing employees on the books.
If the part of the NSW Health workforce that I am most familiar with right now – the Single Patient Digital Record Implementation Authority – is any guide, the department will get a lot of people applying for however many voluntary redundancies it is offering.
NSW Health employed 145,705 full-time equivalent staff as at June 2025, according to its latest annual report, including 106,027 clinical staff and 39,677 employees in other workforce categories.
The latter included 6873 corporate services staff, 22,239 clinical support staff (likely not eligible if they have direct patient contact) and 9360 hotel services staff.
However, the department has not disclosed how many employees meet the eligibility criteria for the voluntary redundancy program, which excludes staff providing direct patient care.
NSW Health’s media team shut up shop about 3pm Sydney time yesterday (actually pretty late for them on a Friday) so we weren’t able to prosecute the many, many questions we have, but you can be sure that the department will be getting a list from us first thing Monday morning.
Stay tuned.
Meanwhile, in Canberra …
Hooly dooly, the Coalition and Greens did a comprehensive job of stitching up Labor in the Senate, up, down, sideways and backwards.
Mark Butler was incandescent about his insurance rebate cut legislation being discharged from the Senate without a debate. Clearly, he believed he was having good faith discussions with Senator Jordon Steele-John – don’t get me started – only to discover that the Greens and Coalition, with a little help from independent Senator Jacqui Lambie, were not in the mood to play.
Mr Butler reintroduced the bill again, unchanged, on Thursday morning, but the realities are that that touted $3 billion in savings promised for aged care is going to be halved at best.
The Greens want pensioners exempted from the rebate cut. That will drop the savings down to about $1.6 billion, according to most estimates.
If only full-rate pensioners are exempted that number will increase, but either way, Mr Butler is not going to have $3 billion to play with.
The Coalition wants no cuts at all to the rebate, as per the wishes of their good mates in the insurance industry, but I suspect they’ll settle for a pensioner carve-out of some sort, in the end.
Whatever the extent of the carve-out, if Mr Butler wants $3 billion for new aged care beds, then he’s going to need to find the money somewhere else.
On Thursday night on the ABC, Mr Butler was quizzed about a pensioner carve-out.
“We recognise the reality, we don’t have a majority in the Senate,” he said.
“We need a constructive debate that determines whether or not we can find a path forward that has majority support from the Senate.
“I wish I didn’t have to bring this measure to the Parliament, but at the end of the day there’s not a money tree out there to fund the huge expansion that is needed in aged care in particular. It’s needed in health and a bunch of other areas, but I think the Parliament needs to appreciate the degree to which we are at an inflexion point in aged care demand.”
KARVELAS: So if you can’t get this through … does that mean you can’t expand the aged care beds because that’s part of the deal? Is that also what you’re saying?
BUTLER: We’re in the process of rolling out these changes. We’re not going to –
KARVELAS: So you have to find the money somewhere else?
BUTLER: We’ve got to find the money somewhere else. And this is what I object to, particularly from the Opposition. And I find the whole position of the Greens unusual because they’ve had it as a policy platform for decades, really, to abolish the private health insurance rebate entirely and put that money into public services, which is effectively what we’re proposing to do in part. But from the Opposition, I still haven’t heard whether they have an opposition to the expansion of these aged care services. I mean Dan Tehan, in his motion in the Parliament this morning, called it “wasteful spending”. Or do they have another idea to fund this? Or do they think it should just go on the credit card?
KARVELAS: Well, their argument is that the budget is in structural trouble and that the government’s not spending money in the right areas and you shouldn’t –
BUTLER: What, so just double down?
KARVELAS: You shouldn’t be making cuts that affect pensioners, that’s their argument. You should find other cuts.
BUTLER: What’s the alternative? I still haven’t got an answer from them about whether they support this expansion of aged care services. And then the follow up would be, how do you think we should fund it? What’s your idea for funding this? Do you just add to the deficit or do you find an alternative save?
I take the responsibility as the Portfolio Minister for Health and Disability and Ageing that at a time where we do have to find additional services across those areas I also have a responsibility to bring what are often difficult saves to the cabinet to fund that expansion.
This is not over. The Senate does not sit again until 16 November, so Mr Butler has a month of hard talking to do.
He’s going to have to concede ground.
Related
Speaking of …
Oh, Sam Rae.
Honestly, the Integrated Assessment Tool saga has now reached farcical proportions if it hadn’t already.
Instead of just restoring human override with the stroke of a pen, Mr Rae has now announced an independent review of the IAT.
Findings won’t be published until the first half of 2027 so once again, elderly Australians are being asked to wait. And wait. And wait. And wait.
Crazy stuff.
Credit Senator Anne Ruston, who also managed to get the Rae-minator to commit to a 12-month sunset clause on the government’s proposed assessment escalation pathway, meaning the provisions will expire unless parliament acts to extend or replace them.
I’m not even going anywhere near the devastating news swirling around Senator Jordon Steele-John. He’s entitled to due process, of course. But, damn.