The 2025–26 Australian Federal Budget outlines a significant push to reform and strengthen the nation’s healthcare system. With a focus on accessibility, affordability, and workforce growth, the 2025 Budget introduces a mix of direct healthcare investment and tax measures that will influence how medical professionals and practices operate.
A cornerstone of the 2025–26 Federal Budget is the historic $8.5 billion investment into Medicare, aimed to revitalise Australia’s universal healthcare system. This substantial funding increase is designed to make primary care more accessible and affordable, particularly for vulnerable and lower-income populations.
Universal bulk billing initiative:
The government plans to fund up to 18 million additional bulk-billed GP visits per year. This measure is intended to address the growing burden on emergency departments by encouraging earlier and more frequent engagement with general practitioners. The policy also supports preventive care, chronic disease management, and early intervention, helping to reduce downstream healthcare costs.
Practice Incentive Payment (PIP) enhancements:
General practices that commit to universal bulk billing will receive enhanced financial incentives under the revised PIP framework. These incentives are intended to offset the reduced revenue from bulk billing and ensure practices remain financially viable. This is particularly significant for clinics in regional and outer metropolitan areas, where financial sustainability has been a concern.
Technology and systems investment:
Part of the Medicare boost will also be directed towards upgrading digital health infrastructure. This includes expanded support for My Health Record and digital prescriptions, aimed at improving patient outcomes, interoperability between providers, and reducing administrative overhead.
Women's health investment ($793 million):
A comprehensive women's health package includes increased Medicare rebates for services such as contraceptive implant procedures, intrauterine device (IUD) insertions, menopause-related health assessments, and longer consultations for complex reproductive health matters. This marks a targeted effort to address longstanding gaps in gender-specific care.
Recognising that increased access must be matched by available healthcare providers, the government is ramping up investment in medical and allied health workforce development.
General practice training expansion:
The budget allocates funding for 200 additional GP training placements annually beginning in 2026, with plans to double that figure by 2028. This is a critical measure to counterbalance the declining number of GPs entering the workforce and to meet projected demand, especially in outer urban, rural, and remote areas.
Targeted scholarships:
More than 400 scholarships will be awarded to nurses, Aboriginal health workers, and rural health professionals. These are designed not only to improve workforce supply but also to promote diversity and regional equity in healthcare delivery.
Support for overseas-trained doctors:
Streamlined pathways and credential recognition for overseas-trained doctors may be supported under workforce expansion initiatives, addressing workforce shortages in the short-to-medium term.
Urgent care clinics:
The government will invest $644 million to establish 50 new urgent care clinics by mid-2026 to provide bulk-billed GP services.
The Pharmaceutical Benefits Scheme (PBS) co-payment cap will be reduced from $31.60 to $25. This measure, expected to save patients collectively over $200 million annually, is designed to ease the financial burden on individuals with chronic conditions or requiring regular medication.
Chronic disease support:
The reduced PBS co-payment particularly benefits patients managing chronic illnesses, who often require multiple medications. Lowering the cost barrier helps ensure consistent medication adherence, improving health outcomes and reducing the risk of hospitalisation.
Enhanced community pharmacy role:
Additional PBS funding will also support community pharmacies in delivering patient education and medication management services, contributing to broader public health outcomes.
The government has allocated $364.5 million over five years starting from 2024–25 to reform the Information, Linkages, and Capacity Building (ILC) program. This initiative aims to provide foundational supports for people with disabilities who may not be eligible for the NDIS, enhancing accessibility in community spaces across Australia.
An additional $175.4 million over four years from 2025–26 is designated to further safeguard the integrity of the NDIS and support individuals with disabilities.
The NDIS is projected to grow to $63.4 billion by 2028–29, positioning it as the third-largest government expenditure. Efforts to curb fraud and unnecessary spending have led to a reduction in cost projections by nearly $1 billion for the next financial year and $4 billion over four years.
From 1 July 2026 the government is reducing the tax payable on the $18,201 to $45,000 tax bracket from the current 16% down to 15%. From 1 July 2027, this rate will be further reduced to 14%. No other changes to the tax brackets have been proposed.
Revised tax brackets (from July 2026):
• $0 – $18,200 | 0%
• $18,201 – $45,000 | 15%
• $45,001 – $135,000 | 30%
• $135,001 – $190,000 | 37%
• $190,001+ | 45%
Revised tax brackets (from July 2027):
• $0 – $18,200 | 0%
• $18,201 – $45,000 | 14%
• $45,001 – $135,000 | 30%
• $135,001 – $190,000 | 37%
• $190,001+ | 45%
• Instant asset write-off: The $20,000 threshold for practices with turnover under $10 million is in place until 30 June 2025. No extension beyond that date has been announced.
• Energy bill relief: Continued $300 rebate for small businesses, benefiting practices with high utility costs.
• Super guarantee: Rate increases to 12% from 1 July 2025. Practices must account for this in staff budgets.
• ATO compliance: Increased resources for oversight on trusts and complex structures could affect high-income professionals and incorporated practices.
The 2025 Federal Budget provides significant investment aimed at strengthening Australia's healthcare infrastructure, enhancing affordability of services, and expanding the medical workforce to meet growing demand. The introduction of targeted tax reforms offers financial relief to lower and middle-income medical professionals, while small business measures support the operational viability of practices.
Nevertheless, practices should carefully consider their financial strategies, particularly in anticipation of rising superannuation obligations and tighter compliance oversight. Overall, these combined healthcare and financial measures represent a positive step towards improving patient outcomes, reducing systemic pressure, and ensuring sustainable, equitable healthcare delivery into the future.
Find an office