Facing pressure from the Greens and community concerns, the ACT will slash its proposed $250 health levy for homeowners, but the charge isn’t gone completely.
The ACT government has back-pedalled in its planned $250 health levy for ratepayers – but not abandoned it altogether.
Treasurer Chris Steel announced the health levy in his budget speech last week, saying the move in response to the need to increase revenue to fund the pressure on ACT hospitals.
“The Canberra community is being called on to contribute to the financial sustainability of our health system through a $250 health levy,” Mr Steel said.
“This will be paid in addition to rates, which will increase on average in 2025-26 by 3.75% for residential land.”
The levy was expected to bring in an extra $205.7 million in revenue over the next four years, starting with $50 million in 2025-26. The plan was to review it after that.
The government said the revenue would fund healthcare, which is the biggest cost to the ACT budget, accounting for about a third of all spending.
The proposed levy was to apply to all property owners in the territory, including residential and commercial. It hit a roadblock with the ACT Greens however, who vowed to fight it.
Following negotiations, the government agreed to a revised health levy – $100 for residential and rural property owners and $250 for commercial properties. Mr Steel said the levy would be implemented through rates notices and reviewed annually.
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To offset the reduced revenue the government will introduce a 2% higher payroll tax rate of 8.75% for large businesses with national payrolls exceeding $150 million from 1 January 2026. This has not been welcomed by business leaders.
Mr Steel said the plan ensured the ACT could deliver high-quality health services while maintaining a sustainable budget.
“This outcome reflects the government’s commitment to working collaboratively to ensure vital services are funded responsibly, without the need for deep cuts to public services or infrastructure investment,” he said.
ACT Greens leader Shane Rattenbury said today that while the reforms were not the Greens’ first choice, “they are a significant win for the community”.
“In the six days since the budget was handed down, the Greens have worked constructively and negotiated in good faith, with one goal in mind: standing up for everyday Canberrans.
“As a result, I’m proud to say we’ve secured meaningful concessions that will make this budget fairer and ease some of the pressure on those doing it tough. Importantly, the Greens have only agreed to support these changes for the next financial year. We will work for an even fairer budget next year,” he said.
“The Greens have been really clear with the ACT Labor government, a flat health levy does not take into account a person’s ability to pay and does not reflect the type of city we want to build. It will unfairly impact a lot of people in our community.
“However, shortly after we stated our opposition to the levy, Labor advised that rates notices were due to go out this week and they had no ability to delay. As a result, there was a significant level of pressure to come to an agreement by the end of today.”