2020 Federal Budget: What it means for Health

The 2020 Federal Budget delivered aged care and mental health funding – plus more to support the COVID-19 response.


What did Health businesses want from the Federal Budget?

The Australian Medical Association (AMA) believes this year’s Budget provides a rare opportunity to reset Australia’s attitude to health expenditure, citing longer waiting lists for elective surgery, hospital bed ratios for older Australians, worsening emergency department times and the backlog of cancelled surgeries and delayed diagnoses due to the pandemic. The AMA was particularly concerned for the aged care system, mental health, the protection of frontline healthcare workers, falling private health cover (noting the private health system accounts for about 60% of elective surgery), as well as the need to keep the virus out of our Indigenous communities.

Against this background, the AMA called for an increase in spending on general practice from less than 12.7% of total Commonwealth Government spending on health to 16%, and at least 5% of the health budget on prevention measures. In relation to aged care, the AMA called for minimum staff-to-resident ratios that reflect the level of care required and ensure 24-hour, on-site availability of registered nurses. More generally, telehealth needs to become a feature of Australia’s health system which requires sustainable funding models. In its pre-Budget Submission (produced earlier in the year), it called for the Government to increase health spending as a share of GDP, noting Australia’s ageing population and increasing incidence of chronic illnesses.
In its pre-Budget Submission, the Australian Dental Association (ADA) called for the Government to provide additional targeted and sustainable funding to address the unmet oral and dental health care needs of Australians identified as ‘priority’ groups. In line with the Government’s aim to develop a National Preventive Health Strategy, the ADA also wants funding for a range of prevention-oriented initiatives designed to reduce the incidence of oral disease.

Optometry Australia (OA) called on the Government to: reinstate biennial Medicare rebates for comprehensive initial examinations for Australians aged 45 to 64; expand the Visiting Optometrists Scheme to provide services for Aboriginal and Torres Strait Islander and rural and remote communities; support greater awareness of general eye health; fund research into enhancing integration of optometric car into primary health; and review the Medicare fee schedule to ensure alignment with true cost of providing care.
The Pharmaceutical Society of Australia called on the Government to implement a number of measures, including: a program to support safe and quality use of medicines within aged care; support rural pharmacists in providing high quality primary care; a pilot opioid stewardship program to reduce harm caused by these medicines; increased incentives to support more pharmacists within general practice; and the introduction of a Commonwealth Chief Pharmacist.

The Council on the Ageing (COTA) welcomed the Aged Care Royal Commission’s special report into COVID-19 and that the Government accepted all six recommendations. It recommended that the Government introduce dedicated funding to support increased visits for aged care residents. This includes funding for screening, infection control and personal protective equipment. It also called for increased funding for home care packages, ensuring that no older Australian wait more than 30 days. There were also calls for significant improvements to aged care workforce capacity and skills, and the greater incentives for business investment in the sector.

What did the Budget deliver?

COVID-19 measures
The Government will spend $1.7 billion over two years to ensure supply and production agreements for COVID-19 vaccines once available. These include agreements for the University of Oxford/AstraZeneca vaccine and the University of Queensland/CSL Limited vaccine. In addition, the Government will spend $123 million to join the COVID-19 Vaccines Global Access Facility (COVAX).
The Government will also spend $1.1 billion in 2020-21 to support access to healthcare services through the COVID-19 pandemic. This includes:
• $711.7 million to extend Medicare Benefits Schedule pathology items for COVID-19 testing, including targeted testing for key sectors such as interstate freight and aged care workers;
• $170.8 million for dedicated respiratory clinics to ease pressure on hospitals; and
• $111.6 million to extend temporary COVID-19 telehealth services.
The Government will provide $1.1 billion in 2020-21 under the National Partnership Agreement on COVID-19 Response to states and territories. This includes a continuation of the COVID-19 viability guarantee for eligible private hospitals that are supplementing public hospital capacity.

Aged care
The Government will spend $2.0 billion over four years to support older Australians, with $1.6 billion to create an additional 23,000 home care packages, and additional funds to improve transparency and regulatory standards in the sector.
The Government will provide $746.3 million over four years (or $700.2 million net of income tax revenue impacts), to provide COVID-19 support to the aged care sector. This includes:
• $245 million supplementary payment to all Commonwealth funded residential aged care and home care providers to cover additional operating costs due to COVID-19. This comprises a lump sum to all providers and the continuation of the 30% increase to the viability and homeless supplements for eligible providers;
• $205.1 million over two years ($159 million net income tax receipts) to provide a third instalment of the workforce retention bonus; and
• $103.4 million this year to support aged care providers to manage and prevent COVID-19 outbreaks.

The Government will spend $375.5 million over four years for new and amended listings on the Pharmaceutical Benefits Scheme (PBS) and the Repatriation Pharmaceutical Benefits Scheme (RPBS).

Mental health
The Government has committed additional funding for mental health across a range of programs, including:
• $100.8 million over two years to provide up to 10 additional psychological therapy sessions each year through the Medicare Benefits Schedule;
• $47.3 million over two years for additional mental health and crisis support services in Victoria due to the COVID-19 pandemic; and
• $62.1 million over four years to improve access to mental health services, including $45.7 million to support vulnerable young people with mental illness to participate in the workforce.

Read more in our Federal Budget 2020: What does it mean for Health report