States Clash With Canberra Over Hospital Funding Shortfall

Ministers say Canberra’s revised offer would slash its hospital share to just 35 percent, leaving states billions short.

Minister for Health Mark Butler at the National Press Club in Canberra, Australia on Aug. 20, 2025. AAP Image/Mick Tsikas

Negotiations over a new healthcare funding deal have hit a roadblock, with state and territory health ministers saying that the Commonwealth’s current proposal fails to honour a deal struck in December 2023.

That agreement promised the federal government would increase its share of hospital funding to 42.5 percent by 2030 and 45 percent by 2035.