Australian Medical Association has welcomed the Federal Government’s additional hospital funding in the 2026-27 Budget but says the package falls short of addressing deeper structural problems across Australia’s healthcare system.
AMA President Dr Danielle McMullen said the government’s commitment of an extra $25 billion under the next National Health Reform Agreement was an important step, particularly following pressure from the AMA’s “Clear the Hospital Logjam” campaign, but warned public hospitals would still face a major funding shortfall.
“We are pleased our long-running Clear the Hospital Logjam campaign has helped bring about this extra $25 billion for the new health reform agreement but as the 2026 AMA Public Hospital Report Card shows, it may not be enough,” Dr McMullen said.
“Our modelling shows a remaining gap of at least $9.6 billion — a gap that must be bridged if the cycle of crisis our public hospitals are in is to be broken.”
The AMA also welcomed funding aimed at improving early childhood healthcare through general practice.
“Our modelling shows a remaining gap of at least $9.6 billion — a gap that must be bridged if the cycle of crisis our public hospitals are in is to be broken”
“We are also pleased to see $120.9 million set aside to support the role of general practice in the early identification of children with development delay or neurodevelopmental difference through a Medicare funded three-year-old health assessment and expanded Comprehensive Health Assessment Program,” Dr McMullen said.
“It will be critical for all governments to ensure that appropriate support for eligible children is available on GP referral.”
Despite those measures, the medical body said the Budget missed opportunities to reform Medicare, strengthen primary care and address pressures in the private health sector.
“While we welcome a commitment to undertake consultation on private health reform, cuts to the Private Health Insurance Rebate for people who are 65 years and over are likely to see older Australians on modest incomes drop or downgrade their cover and this may put more pressure on the public hospital system,” Dr McMullen said.
“The trend of people paying more for less when it comes to private health insurance cannot continue if we are serious about protecting our healthcare system. Our proposal of a minimum 90 per cent pay-out ratio would help to address the growing imbalance we’re seeing.”
Dr McMullen said stronger oversight of the private health system was becoming increasingly necessary.
“The need for a Private Health System Authority is becoming increasingly urgent to drive reform and support a more sustainable private health system,” she said.
The AMA also criticised the lack of broader reforms to Medicare and GP funding, arguing the Budget relied too heavily on short-term measures.
“The budget also neglects much needed reforms in primary care to ensure Australians can get the care they need, ignoring our costed recommendations that would put the system on a sustainable footing is a missed opportunity.”
The government’s ongoing support for urgent care centres was also questioned, with the AMA warning the model needed stronger links to regular GPs.
“Urgent care centres don’t provide the structural reform to Medicare that’s needed and interventions to support bulk billing in discrete geographic areas are not long-term fixes,” Dr McMullen said.
“We need meaningful reform and funding that improves after-hours access to GPs and modernises Medicare, so it reflects the complex contemporary care needs of an ageing population.”
Dr McMullen said the Budget failed to adequately address workforce shortages and specialist access, despite increasing demand across the health system.
“The time for delay is over — it’s time to modernise Medicare,” she said.
The AMA also renewed calls for the establishment of an Independent Health Workforce Planning Agency and more specialist training places to help improve access to care.
The organisation further criticised the absence of a sugar tax in the Budget, describing it as a missed public health measure that could improve long-term health outcomes and raise additional revenue.
“Decisions taken today about healthcare can leave a legacy that shapes the health of our communities for many, many years to come,” Dr McMullen said.
“Our recommended tax on sugary beverages is a win/win for everyone as it would reduce annual sugar consumption by about 2kg per person, raise around $3.6 billion in four years, and improve public health across Australia.”
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