Budget 2025–26: Health overview

Budget 2025–26 introduces a suite of healthcare measures aligned with cost‑of‑living relief, equity in access, and workforce sustainability. The most significant initiatives sit within primary care, pharmaceuticals, women’s health, aged care, and childcare: each shaping patient or family experience and provider operations in distinct ways. While consumers benefit from reduced costs and expanded services, provider sentiment is mixed, reflecting viability pressures, workforce constraints, and concerns about long‑term reform pathways. Read the full report.

Key takeaways

• Expanded Medicare bulk billing for all Australians.
• 50 additional Urgent Care Clinics, bringing the total network to 137 clinics.
• Women’s health package worth $792.9m improving access to treatments and specialist clinics.
• PBS general co‑payment reduced from $31.60 to $25 from 1 January 2026.
• Aged care wage increases funded, with future allocations anticipating additional rises.
• Childcare 3‑Day Guarantee supporting up to ~100k families with subsidised care.

Context

The budget reinforces the cost‑of‑living narrative ahead of the federal election. While households benefit from cheaper healthcare access, providers face decisions about business model viability, especially in metro primary care. Aged care and childcare sectors receive targeted funding uplifts, though both continue navigating signficant reforms.

Key developments

Expanded bulk billing incentives

Bulk billing expansion aims to shift practices toward fully bulk‑billed models, though metro clinics may find incentives insufficient to offset lost private fee revenue.

Growth of Urgent Care Clinic network

UCC expansion boosts consumer access to acute care alternatives, yet cost‑effectiveness vs. GP care remains debated.

Women’s health investment

New clinics, rebates and PBS listings support long‑term improvement in treatment access for pelvic pain, menopause and endometriosis.

Cheaper medicines via PBS changes

Reduced co‑payments support medication adherence and pharmacy viability, especially in regional communities.

Aged care sector reform pressure

Wage rises funded, but providers warn of major burdens in the transition to the new Aged Care Act and ahead of the rollout of Support at Home.

Childcare reforms accelerate

3‑Day Guarantee and Activity Test removal increase accessibility but potentially intensify staffing challenges in an already constrained workforce.

Challenges & risks to watch

• GP uptake of expanded bulk billing incentives given growing prevalence of mixed‑billing especially in metro practices.
• Unclear cost‑effectiveness of expanding UCCs compared with strengthening the established GP system.
• PBS changes require pharmacies to maintain service capacity amid flat program growth.
• Aged care providers face sigtnficant requirements around ICT upgrades, regulatory compliance, and related timeline pressure.
• Childcare workforce shortages may undermine demand uplift from the 3‑Day Guarantee.

Outlook

Healthcare demand is expected to grow in line with population and demographic shifts, with GP services remaining central to the system despite UCC expansion. Aged care reforms will dominate sector focus through 2025–26, while the childcare sector faces further potential universal care reforms depending on election outcomes.

Strategic considerations

• Primary care practices modelling the financial impact of bulk billing incentives with their accountants.
• Women’s health providers preparing to integrate new MBS and PBS items.
• Aged care organisations planning staged transition strategies and ICT investment.
• Childcare services strengthening recruitment pipelines and retention strategies given potential demand uplift.

Conclusion

Budget 2025–26 seeks to support affordability for consumers with selective sector investment. While benefits for patients are clear, providers across healthcare, aged care and childcare face complex, sector‑specific operational impacts. Navigating these changes will likley require strong planning, workforce strategies, and ongoing adaptation.

Next steps

• Download the full version of ANZ Health Check: Budget Overview
• Explore more of our Health banking services.
• Talk to one of our specislists by requesting a call back.