30/01/2026
The states and federal government have signed their funding agreement. This means that thriving kids will start in October 2026.
Albanese strikes $25bn deal with states to end hospital funding battle and agrees to delay autism program
National cabinet agrees to top up payments for smaller states, bringing total hospital spending to $219bn over the next five years
• Tom McIllroy The Guardian
Fri 30 Jan 2026 12.44 AEDT
Anthony Albanese and state premiers have signed a $25bn deal to fund health and hospital services around the country, while agreeing to stem growth in the National Disability Insurance Scheme to 6% or less.
Friday’s meeting of national cabinet finalised a landmark agreement to top up payments for smaller states, bringing total federal spending for public hospitals to $219bn over the next five years.
Premiers, chief ministers and the prime minister also agreed to delay the start of a new national program providing services to children with autism and other developmental delays to October, with full implementation due to commence from 1 January 2028. N
Guardian Australia revealed this week the federal government had offered to delay the start of the Thriving Kids program by three months, in line with demands from state premiers and chief ministers.
The new program had been due to start on 1 July, but state governments had warned they were not ready to take responsibility for foundational supports for young children and a delay was necessary.
“These reforms will ensure that Australians can continue to access world-class health care as well as disability supports,” Albanese said after the meeting in Sydney.
“It prioritises investment in our precious public health system, and builds on my government’s commitment to strengthen Medicare.”
The health minister, Mark Butler, has called the deal the biggest increase in hospital funding “in anyone’s memory”.
“Really, the truest truism of Australian politics is state premiers always want more from the commonwealth, particularly for their hospitals,” he said.
It comes ahead of the pre-election caretaker period in South Australia, due to begin next month, before voters go to the polls in March.
Among additional sweeteners being offered before Friday’s meeting were budget funding “adjustments” to benefit smaller states, as they struggle with rising costs for health and hospital services.
Butler and Albanese had offered $23bn in new funding, part of lengthy negotiations over plans for the federal share of hospital funding to grow to 42.5% by 2030 and reach a 45% share by 2035.
An extra $2bn in federal funding would go towards speeding up hospital discharge for elderly people waiting for beds in aged care facilities. The most recent estimate suggests more than 3,000 people are waiting to transfer from hospital wards to aged care.
Labor wanted the deal signed by national cabinet before Christmas, but the emergency response to the Bondi beach terror attack upended the plans.
The introduction of Thriving Kids has sparked concern among families who use the NDIS.
Part of efforts to ease pressure on the rapidly growing budget for the national scheme, the new program will provide services for children under eight years old who have developmental delays and other low-to-moderate needs.
Support services will be delivered through schools, health clinics and community facilities. Broader changes to NDIS access rules are due to come into effect from mid-2027.
Figures from may 2025 showed children under 15 made up 43% of the more than 717,000 participants enrolled on the NDIS, but just 13% of all payments. Participants who had autism or other developmental delays as their primary disability made up half of the scheme’s participants, but just 23% of total payments.
