On the evening of 9 May 2023, the Treasure, Jim Chalmers, handed down the second and first full year Albanese Government Budget, the first to project a surplus in 15 years.

Open his second Budget speech, and following an acknowledgement of Country, Treasurer Jim Chalmers announced a Budget in which the Albanese Government has sought to balance 'spending restraint to keep the pressure off inflation' while investing in key services, ensuring that services such as Medicare and the National Disability Insurance Scheme (NDIS) are 'secure, reliable and sustainable'.

Although the Budget focused heavily on the cost of living challenges facing Australians, it included significant investments in Aged Care, Disability and the NDIS, Healthcare and Digital Health, to ensure a 'strong sustainable care economy', implement a vision shared between the States, Territories and Commonwealth of 'affordable reliable healthcare' and help 'retain, reward and recruit' aged care workers by ensuring they receive 'fair pay for their vital work'.

We have collated the key take-outs from the Treasurer's Budget speech and the May Budget 2023 – 24 Papers:

Aged Care

'You deserve every cent' - Jim Chalmers in announcing funding for the record 15% pay increase for aged care workers.

As expected, the Budget includes $10.9 billion over 5 years from 2022–23 (and $29.2 billion over 10 years from 2022–23) to meet the cost of the Aged Care Work Value case with funding to other aged care programs including residential aged care and the Home Care Packages Program, which will be delivered through increases that will flow through program indexation.

Aged Care Work Value Case

The Government will provide $515.0 million over 5 years from 2022–23 (and $956.9 million over 10 years from 2022–23) to fund the outcome of the Fair Work Commission’s decision on the Aged Care Work Value Case.

The decision was to increase award wages by 15 per cent from 30 June 2023 for many aged care workers including registered nurses, enrolled nurses, assistants in nursing, personal care workers, home care workers, recreational activity officers, and some head chefs and cooks. This funding includes:

• $311.2 million for a new grant program for Commonwealth Home Support Programme providers to cover the cost of the increase in award wages;
• $98.7 million for a new grant program to fund historical leave provisions for Commonwealth-funded aged care providers;
• $58.9 million for a targeted indexation boost to funding for the Indigenous Employment Initiative, Multi-Purpose Service Program, National Aboriginal and Torres Strait Islander Flexible Aged Care Program, and Trusted Indigenous Facilitators program;
• $6.7 million for a transition grant to provide temporary viability support for residential aged care providers;
• $2.0 million for a transition grant to cover any potential shortfall for care recipients under the Home Care Packages Program; and
• $37.4 million in implementation costs for the Department of Health and Aged Care and Services Australia.

Postponing Support at Home

The Government will postpone the commencement of the Support at Home Program to 1 July 2025 in response to sector feedback that a longer lead time is needed, and extend grant arrangements for the Commonwealth Home Support Programme for a further 12 months to 30 June 2025.

Funding for in-home aged care – more Home Care Packages

The Government will provide additional funding of $338.7 million over 4 years from 2023–24 to improve the in-home aged care system. This funding includes:

• $166.8 million in 2023–24 to release an additional 9,500 Home Care Packages;
• $73.1 million in 2023–24 for the design, build, implementation and sustainment of the ICT changes necessary to enable the new Support at Home Program (which is set to now be introduced in 2025);
• $71.5 million over 4 years from 2023–24 for the Independent Health and Aged Care Pricing Authority to undertake pricing and costing research activities to develop efficient unit prices annually for the Support at Home Program;
• $15.7 million over two years from 2023–24 to establish a single aged care assessment system, including the establishment of a First Nations assessment workforce;
• $10.9 million in 2024–25 to run a trial to test products and services for a new assistive technologies loan program, commencing in July 2024 within 2 states and territories;
• $0.7 million in 2023–24 to establish the Aged Care Sustainability Taskforce to provide advice to Government on the creation and maintenance of a high quality and sustainable aged care system; and
• $0.1 million in 2023–24 for an Independent Implementation Readiness Assessment of the aged care reforms.

Further aged care funding

The Government will provide $827.2 million over 5 years from 2022–23 to continue to improve the delivery of aged care services and respond to the Final Report of the Royal Commission into Aged Care Quality and Safety. Funding includes:

• $487.0 million over 4 years from 2023–24 (and $133.6 million ongoing) to extend, and make ongoing, the Disability Support for Older Australians Program;
• $112.0 million over 4 years from 2023–24 to introduce a new General Practice in Aged Care incentive payment to improve general practitioner attendance and continuity of care in residential aged care homes, and to reduce avoidable hospitalisations;
• $98.7 million over two years from 2023–24 for a new Market Adjustment Program and to provide business advisory services to improve the viability of the residential aged care sector;
• $81.9 million over 3 years from 2023–24 to develop and implement a new Aged Care Act to support aged care sector reform and undertake discovery and design of associated ICT system changes;
• $41.3 million over 4 years from 2023–24 (including $11.9 million in capital funding from 2022–23) to build a new place assignment system, allowing older Australians to select their residential aged care provider; and
• $6.3 million over 5 years from 2022–23 for the Independent Health and Aged Care Pricing Authority to deliver its functions in line with amendments to the Aged Care Act 1997 and the Health Reform Act 2011 which took effect on 12 August 2022.

Royal Commission recommendations

The Government also announced that it will provide additional funding of $309.9 million over 5 years from 2022–23 to implement the recommendations from the Royal Commission into Aged Care Quality and Safety and other initiatives to strengthen the regulation of the aged care sector and improve the health and safety of older Australians receiving aged care. This funding includes:

• $139.9 million over 4 years from 2023–24 to improve the accountability and transparency of approved aged care providers through enhancements to the Star Rating system;
• $72.3 million in 2023–24 to support the development and implementation of a new, stronger Aged Care Regulatory Framework to support the new Age Care Act which is due to commence from 1 July 2024;
• $59.5 million over 5 years from 2022–23 to fund the ICT infrastructure to establish a national worker screening and registration scheme from 1 July 2024;
• $25.3 million in 2023–24 to ensure the Aged Care Quality and Safety Commission is appropriately resourced to deliver its audit and compliance program in 2023–24; and
• $12.9 million over two years from 2023–24 to improve food and nutrition in aged care through the development, monitoring and enforcement of food and nutritional standards.

Additional AN-ACC supplement and Basic Daily Fee

The Government will introduce a new hoteling supplement of $10.80 per resident per day by separating out the existing hoteling component of the Australian National Aged Care Classification (AN-ACC) price (the $10 Basic Daily Fee Supplement) starting 1 July 2023. The Government will also adjust the care minute allocations within the AN-ACC funding model from 1 October 2023 to better align care minutes with resident needs.

First Nations Aged Care Reforms

The Government will provide $827.2 million over 5 years from 2022–23 to continue to improve the delivery of aged care services and respond to the Final Report of the Royal Commission into Aged Care Quality and Safety. Funding includes:

$487.0 million over 4 years from 2023–24 (and $133.6 million ongoing) to extend, and make ongoing, the Disability Support for Older Australians Program; and

$112.0 million over 4 years from 2023–24 to introduce a new General Practice in Aged Care incentive payment to improve general practitioner attendance and continuity of care in residential aged care homes, and to reduce avoidable hospitalisations;

$98.7 million over two years from 2023–24 for a new Market Adjustment Program and to provide business advisory services to improve the viability of the residential aged care sector;

$81.9 million over 3 years from 2023–24 to develop and implement a new Aged Care Act to support aged care sector reform and undertake discovery and design of associated ICT system changes;

$41.3 million over 4 years from 2023–24 (including $11.9 million in capital funding from 2022–23) to build a new place assignment system, allowing older Australians to select their residential aged care provider;

$6.3 million over 5 years from 2022–23 for the Independent Health and Aged Care Pricing Authority to deliver its functions in line with amendments to the Aged Care Act 1997 and the Health Reform Act 2011 which took effect on 12 August 2022; and

$77.3 million over 4 years from 2023–24 to improve outcomes for Aboriginal and Torres Strait Islander people in aged care, including:

• $52.1 million over two years from 2023–24 to increase the funding available to aged care providers in very remote areas under the National Aboriginal and Torres Strait Islander Flexible Aged Care Program by calculating funding levels for residential care services using the Australian National Aged Care Classification price;
• $8.1 million over 3 years from 2023–24 to support providers transition to new accountability measures and obligations under the proposed new Aged Care Act;
• $7.6 million over two years from 2023–24 to fund capacity building of Aboriginal Community Controlled Organisations to potentially provide aged care services;
• $4.1 million over 4 years from 2023–24 to develop mandatory cultural awareness training for aged care staff;
• $3.8 million over 4 years from 2023–24 to support project and program assurance activities; and
• $1.7 million in 2023–24 to appoint an interim First Nations Aged Care Commissioner.

Temporary reduction in the residential aged care provision ratio

The Government will temporarily reduce the residential aged care provision ratio from 78.0 places to 60.1 places per 1,000 people aged over 70 years. The reduction in the ratio reflects the increasing preference of older Australians to remain in their homes, and will apparently save $2.2 billion over 3 years from 2024–25.

Combating COVID-19 aged care funding

The Government will provide additional funding of $591.3 million over two years from 2022–23 to continue the Government’s response to COVID-19 in aged care. Funding includes:

• $536.6 million over two years from 2022–23 to reimburse aged care providers for additional costs incurred due to COVID-19 outbreaks that occur on or before 31 December 2023;
• $41.3 million over two years from 2022–23 to extend access to in-reach PCR testing in residential aged care homes to 31 December 2023; and
• $13.4 million in 2023–24 to reimburse aged care providers for the cost of leave entitlements for casual staff and those who have no other access to leave payments where staff cannot attend work due to being COVID-19 positive.

Younger people in aged care

The Government will provide $7.3 million over 3 years from 2023–24 for a package of initiatives to further reduce the number of people under the age of 65 living in residential aged care. Funding includes:

• $3.6 million over two years from 2023–24 to provide targeted education and training packages for General Practitioners, clinical staff, social workers, carers, advocates, families, and other organisations and people that support and influence the decision making of younger people in residential aged care
• $2.4 million over 3 years from 2023–24 to establish a central function in the Department of Health and Aged Care to support nationally consistent decision making on the eligibility of younger people seeking to enter residential aged care
• $1.3 million in 2023–24 to evaluate actions already taken by governments to reduce the number of younger people in residential aged care, to inform future initiatives

NDIS and Disability

NDIS Funding

The Government has committed $732.9 million in funding to the NDIS to 'improve capability, capacity, and systems to better support participants', funding includes:

• $429.5 million over 4 years from 2023 – 24 to invest in the National Disability Insurance Agency’s (NDIA’s) capability and systems, to improve processes and planning decisions;
• $73.4 million over 4 years from 2023 – 24 to better support participants to manage their plan within budget;
• $63.8 million over 2 years from 2023 – 24 to take a lifetime approach to ensure plans are more transparent and flexible for life events;
• $56.4 million over 4 years from 2023 – 24 to strengthen supported independent living decisions;
• $48.3 million over 2 years from 2023 – 24 to invest in the NDIA’s ability to detect, respond to, and reduce fraud and non-compliant payments, and to develop a business case for new IT platforms and systems to detect and prevent fraud and non-compliant payments;
• $29.3 million over 2 years from 2023 – 24 to support the quality and effectiveness of services provided to participants, through improving oversight of services and increasing take up of evidence-based supports;
• $24.6 million over 4 years from 2023 – 24 to work with participants and providers to trial blended payment models, to increase incentives for providers to innovate service delivery and improve outcomes; and
• $7.6 million over 2 years from 2023 – 24 to partner with communities to pilot alternative commissioning approaches to improve access to supports in remote and First Nations communities.

The Government has also affirmed their commitment to an NDIS Financial Sustainability Framework, intended to moderate growth of the NDIS to no more than 8 per cent by 1 July 2026, with further moderation of growth as the NDIS matures. This is to ensure that the NDIS remains sustainable and 'secure' the future of the NDIS.

NDIS Quality and Safeguards Commission

The Budget committed $142.6 million over two years from 2023–24 to support the NDIS Quality and Safeguards Commission in carrying out its role of safeguarding NDIS participants.

Disability Funding

In addition to the NDIS, a number of measures were included in the Budget which were intended to target the disability sector more broadly, and people living with disability in Australia, including:

• Funding has been allocated to increase the disability and aged care sectors workforce, including $15.2 million to support the establishment of the Y Careers Agency to provide young people with employment opportunities in the care economy and $14.1 million for targeted financial support for disability workers who deliver personal support to NDIS participants, contract COVID-19, and do not have access to leave entitlements.
• Funding has been allocated to increase employment outcomes of individuals with disability, including $17.7 million (and $4.7 million per year ongoing) for the Higher Education Disability Support Program to enable providers to better support students with disability to access and succeed in higher education, $11.7 million to establish a targeted disability employment advocacy service and information program for supported employees, $6.0 million to evaluate existing supported employment initiatives and trials, pilot job expos for supported employees and their families, and help organisations transition to the revised award, $3.2 million to extend the Job Access Complaints Resolution and Referral Service and the National Disability Abuse and Neglect Hotline and $1.1 million to undertake initial research, design and consultation work in preparation for the delivery of the Government’s election commitment to establish a Disability Employment Centre of Excellence.
• $27.0 million has been allocated over 4 years from 2023–24 to undertake additional pilots of early interventions for infants with signs of autism, and further progress the Government’s election commitment to deliver a National Autism Strategy.
• $10.2 million has been allocated to support the Department of Social Services continue to provide policy and over sight of the NDIS and NDIA, including to establish a Central Coordination of Disability Policy function.

Healthcare

The Budget included significant investment in healthcare initiatives. Healthcare funding in the Budget includes:

$3.5 billion over 5 years to triple the bulk billing incentive for the most common consultation for children under 16, pensioners and other Commonwealth concession care holders including all face to face GP consultations and telehealth consultations;

$2.2 billion over 5 years for new and amended listings to the Pharmaceuticals Benefits Scheme;

$358.5 million over 5 years to deliver Medicare Urgent Care Clinics by the end of 2023, including for 8 new clinics, these clinics are designed to take strain off hospitals emergency departments and improve access for urgent but non-life threatening care;

$125.6 million over 5 years from 2022–23 to improve access to primary health care services and improve clinical practice through amendments to the MBS, including:

• $23.6 million to remedy previous changes to MBS orthopaedic items which have impeded patient access to orthopaedic procedures;
• $18.5 million for testing genetic variants in patients suspected of having either a myeloid or lymphoid haematological malignancy;
• $16.8 million to introduce a new MBS item for an EndoPredict® gene expression profiling test to determine a patient’s risk of recurrent breast cancer;
• $13.1 million to introduce genetic testing for hearing loss in children; and
• $10.9 million in 2023–24 to support the MBS Continuous Review program to ensure the MBS remains clinically appropriate;

Permitting the dispensing of 2 months' worth of by pharmacies from 1 September 2023, with an estimated saving of at least $1.2 billion over 5 years from 2022-23;

$91.1 million over 2 years to commence the establishment of the Australian Centre for Disease Control;

$511.1 million over 4 years from 2023-24 (and $101.1 million ongoing) for a new national lung cancer screening program, nicotine vaping product regulation and reform, and cessation support activities for tobacco and vaping use, including:

• $263.8 million over 4 years from 2023–24 (and up to $101.1 million per year ongoing) to establish and maintain a national lung cancer screening program, including program design, implementation and monitoring, National Cancer Screening Register expansion, communications, workforce training and updated clinical guidance;
• $141.2 million over 4 years from 2023–24 to expand the Tackling Indigenous Smoking program to prevent the uptake, and reduce the prevalence, of vaping by First Nations Australians;
• $63.4 million over 4 years from 2023–24 for national public health campaigns to prevent uptake and reduce smoking and vaping, including additional funding provisioned in the Contingency Reserve for a targeted youth campaign;
• $29.5 million over 4 years from 2023–24 to increase and enhance smoking and vaping cessation support; and
• $13.3 million over 4 years from 2023–24 for legislative and regulatory reform, the testing of tobacco products for prohibited ingredients, to increase inspections of manufacturers, importers, wholesalers and retailers, and to communicate these changes to stakeholders;

$556.2 million to strengthen Australia’s mental health and suicide prevention system, including:

• $260.2 million over two years from 2023–24 to extend Commonwealth psychosocial supports for people with severe mental illness who are not in the NDIS;
• $136.0 million over 4 years from 2023–24 (and $36.0 million ongoing) to support the mental health of survivors of torture and trauma before moving to Australia on humanitarian grounds, through the Program of Assistance for Survivors of Torture and Trauma, and other culturally and linguistically diverse communities;
• $91.3 million over 5 years from 2022–23 for additional psychology placements, including 500 psychology post-graduate placements, 500 one-year internships, and 2,000 supervisor training sessions (1,000 of which will be refresher places), and a redesign of psychology higher education pathways;
• $17.8 million over 5 years from 2022–23 to upskill the mental health capabilities of the broader health workforce through training, resources and professional development materials. This will include reviewing and improving undergraduate curricula for nursing, midwifery and allied health to ensure students are receiving contemporary training in mental health;
• $14.4 million over two years from 2023–24 to support the continuation of postvention services nationally for people experiencing grief and distress as a result of suicide loss; and
• $8.7 million in 2023–24 to continue the current service capacity of digital mental health services and to maintain the Head-to-Health website;

$363.1 million over 4 years from 2023–24 to support closing the gap in Aboriginal and Torres Strait Islander peoples’ health and wellbeing outcomes, and improve outcomes in aged care, including:

• $238.5 million over 4 years from 2023–24 to improve First Nations cancer outcomes through building capability and growing the healthcare workforce to improve screening and prevention activities, coordination, access support and research and data collection;
• $77.3 million over 4 years from 2023–24 to improve outcomes for Aboriginal and Torres Strait Islander people in aged care, including:
  • $52.1 million over two years from 2023–24 to increase the funding available to aged care providers in very remote areas under the National Aboriginal and Torres Strait Islander Flexible Aged Care Program by calculating funding levels for residential care services using the Australian National Aged Care Classification price;
  • $8.1 million over 3 years from 2023–24 to support providers transition to new accountability measures and obligations under the proposed new Aged Care Act;
  • $7.6 million over two years from 2023–24 to fund capacity building of Aboriginal Community Controlled Organisations to potentially provide aged care services;
  • $4.1 million over 4 years from 2023–24 to develop mandatory cultural awareness training for aged care staff;
  • $3.8 million over 4 years from 2023–24 to support project and program assurance activities;
  • $1.7 million in 2023–24 to appoint an interim First Nations Aged Care Commissioner;
• $28.2 million over 3 years from 2023–24 for workforce accommodation to support the delivery of 30 dialysis units for First Nations peoples in regional and remote Australia with end-stage kidney disease;
• $16.7 million over 4 years from 2023–24 to develop a national campaign to promote increased uptake of First Nations Australians’ health assessments, and improve administration and coordination of health assessments and linkages with allied health service and update eligibility for outcome payments under the Practice Incentives Program – Indigenous Health Incentive to include all Medicare Benefits Schedule items for the preparation and review of a Mental Health Treatment Plan;
• $1.4 million over two years from 2023–24 to expand the delivery of the Strong Born campaign which provides information about fetal alcohol spectrum disorder to First Nations peoples; and
• $0.9 million in 2023–24 to the Australian Indigenous Doctors’ Association to continue to support Aboriginal and Torres Strait Islander doctors and medical students; and

$219.4 million over 4 years from 2023‐24 to progress work on longer-term adult public dental reform, extend the existing Public Dental Services for Adults funding agreement to 30 June 2025, and fund the 2023–2026 National Dental Care Survey $46.8 million to recognise the important role of nurse practitioners and midwives in the delivery of health care services.

Digital Health

Strengthening Medicare

As part of the Budget's investment in Strengthening Medicare, the Budget invests in the modernisation and strengthening of Australia's digital health infrastructure, including:

• $429 million investment over two years from 2023 – 24 to modernise My Heath Record, including investment in secure data sharing across all healthcare settings, including pathology and diagnostic imaging and targeted investment to increase connectivity between Allied Health Professionals and My Health Record. This will provide health professionals the digital and data tools needed to provide improved and more co-ordinated care and will increase the ability of individuals to securely access and share their own data;
• $325.7 million investment over 4 years from 2023 – 24 to establish the Australian Digital Health Agency as an ongoing entity (including a review of the Agency's implementing legislation to make sure it remains fit for purpose); and
• $69.7 million investment over 4 years from 2023 – 24 to digitise health services and better connect health data to improve access to services for customers and health professions, in response to the recommendations made in the Strengthening Medicare Taskforce Report and Independent Review into Medicare Integrity and Compliance. A stronger Medicare utilising digital systems to drive coordinated care, provide better connections between different parts of our health system to improve health outcomes.

MyMedicare System

The Government has announced the introduction of the MyMedicare system which will strengthen the relationship between doctors and their patients and facilitate better continuity of care. Over time, MyMedicare will be extended to Nurse Practitioners and other primary healthcare providers. Funding in the Budget includes:

• $19.7 million over 4 years from 2023 – 24 (and $3.2 million per year ongoing) to implement MyMedicare; and
• $5.9 million over 5 years from 2022–23 to facilitate longer telehealth consultations through the MBS for patients and general practices which are registered with MyMedicare from 1 November 2023.

National Disability Data Asset

The Government has allocated $31.4 million over 4 years from 2023 – 24 to establish the National Disability Data Asset and the Australian National Data Integration Infrastructure, its underlying infrastructure. This database will be a national asset containing de-identified information on people with disability, to inform policy development, service delivery and make the Australian's Disability Strategy accountable.

Other Digital Investment

It is notable that the Budget also included significant investment in digital, which although not directly related to Digital Health, may feed into Digital Health, the development of Digital Health skills and solutions in Australian and the ongoing digitisation of the health, aged care and disability sectors through their application, including:

• $101.2 million investment over 5 years to support the development and uptake of technologies that are enabling capabilities across Australian industries - commencing in quantum and artificial intelligence. It will also extend the National AI Centre and its role supporting responsible AI usage.
• Cyber security: The Government is investing $23.4 million to help small businesses build their resilience to cyber security attacks by training in-house cyber wardens. This measure will help mitigate and reduce the harms associated with cyber-attacks on small business.
• $2 billion investment in new digital solutions for improved service delivery, modernising outdated legacy platforms and IT systems, and foundational work to ensure that critical future investment maximises value for the taxpayer.
• $26.9 million investment in 2023-24 to expand Digital ID – helping to increase efficiency and consumer protection, reduce fraud, and make it easier for people to access services online.
• A new 5-year National Skills Agreement to commence from 1 January 2024. The Government will also fund a further 300,000 TAFE and vocational education training places to become fee-free. This will assist students with cost-of-living pressures and support critical and emerging industries, such as the care, clean energy and digital sectors with the skills pipeline they need.