Over half of that will come from the aged care sector.
Treasurer Jim Chalmers and finance minister Katy Gallagher have targeted the health, disability and aged care portfolio to provide $473.8 million in savings to Australian taxpayers over the next four years.
The Mid-Year Economic and Fiscal Outlook, presented by Mr Chalmers today, was heavy on general outcomes – this year’s deficit is $5.4 billion less than forecast, the budget is $8.4 billion better than it was at the election, gross debt this year is $28 billion lower than at the last election, peaking at 37% cent of GDP, lower than the 44.9% forecast.
But for the Department of Health, Disability and Ageing, the devil is in the fine print of the MYEFO documents.
The bulk of the almost half a billion in savings will come from the aged care sector where the treasurer has called for savings of $255.7 million over four years from 2025–26 (and $21.9 million per year ongoing) through “more targeted and streamlined aged care funding”.
Savings will be reinvested into new or expanded aged care programs and include:
- $112.8 million in 2025–26 through reprioritising unspent funds from the Support at Home program thin markets grants to other aged care services, with the Support at Home program thin markets grants to continue to have a demand‑driven selection process;
- $80 million over two years from 2025–26 through reprioritising unspent funds in the Commonwealth Home Support program growth funding grant opportunity to other aged care services;
- $62.8 million over three years from 2026–27 (and $21.9 million per year ongoing) by consolidating the Aged Care Program Support Fund into the Dementia and Aged Care Support Fund.
MBS
The Commonwealth appears to have canned one of the three original promised MyMedicare incentive.
When MyMedicare was first announced in 2023, it was meant to have three big patient-facing programs attached.
These were: rebates for long telehealth appointments, the General Practice in Aged Care Incentive, and a wraparound primary care program for frequent hospital users.
The first two have been delivered, with a review of the GP aged care incentive now underway.
But, according to a progress report released by the Department of Health, Disability and Ageing just last week, the primary care for frequent hospital users program had not left the planning phase as of mid-2025.
A summary of Strengthening Medicare policies from 2023 described the incentive-to-be as “designed … to support general practices through a blended funding model linked to MyMedicare to work in primary healthcare team”.
“The government will also achieve efficiencies of $179.1 million over four years from 2025–26 (and $47.8 million per year ongoing), including: $175.8 million over four years from 2025–26 (and $46.7 million per year ongoing) by not proceeding with the Frequent Hospital Users program with funding to be reinvested in new or expanded health services,” the papers read.
HSD has confirmed with health minister Mark Butler’s office that this is the same program which was slated to be part of MyMedicare.
“The Department of Health has undertaken extensive stakeholder consultation on the delivery of the Frequent Hospital Program first announced in Budget 2023-24, including with State and Territory Governments,” a government spokesperson said.
Related
“From the consultation it was clear the model-of-care could not be designed to both support these patients and deliver on its intended purpose through MyMedicare.”
The MYEFO also included $14.6 million over four years to implement legislation modernising bulk-billing assignment of benefit, as well as $9.3 million to “introduce patient end support MBS items for eligible Medicare providers who are providing in‑person support to a MyMedicare registered patient during a GP video consultation”.
There was also an extra $17 million to extend the Workforce Incentive Program Rural Advanced Skills Stream, which was due to sunset on 31 December after just two years of operation.
It’s not out of the woods yet, though; the $17 million will only sustain the incentive program for another 12 months.
Other rural GP programs to get funding extensions this MYEFO included a pre-fellowship program that supports non-vocationally registered doctors to work in general practice, rural WIP loadings and the Other Medical Practitioners program, which enables non-vocationally registered GPs to access higher MBS rebates when working in rural areas.
Workforce
The government has doubled down on its plans to reduce external contracting, targeting “efficiencies” of $18.0 million over four years from 2025–26 (and $0.5 million per year ongoing).
About $15.9 million will be saved over three years from 2025–26 by ceasing outsourcing arrangements for the provision of “independent advice on the distribution and allocation of training places under the Australian General Practice Training program”, with workforce planning and prioritisation assessments to be undertaken by the DoHDA.
The Department failed miserably to reduce its outsourcing costs in the past year, effectively doubling what it spent from $158 million in 2023-24 to more than $315 million in 2024-25.
Another $2.1 million will be saved over four years from 2025–26 (and $0.5 million per year ongoing) by consolidating the Murray‑Darling Medical Schools Network and two Rural Health Multidisciplinary Training sub‑programs into a single Rural Multidisciplinary Training program to improve program delivery and reduce the administrative burden and reporting requirements of participating universities, according to the MYEFO documents.
Mental health in PHNs
The government has also targeted mental health support programs delivered by Primary Health Networks, promising savings of $21 million over two years from 2027–28 (and $10.8 million per year ongoing).
“The savings from this measure will be redirected to other government policy priorities in the Health, Disability and Ageing portfolio.”
Read the full MYEFO documents here.