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Health Budget 2021 – what the bird’s eye view reveals

Understanding the impact of the Federal Budget on the health system requires more than just a close analysis of individual funding measures.

Taking a ‘bird’s eye’ view can help compare trends in spending over time and reveal telling facts about government priorities.

Below, Charles Maskell-Knight compares the estimates from the 2021-22 Budget with those from last year.

He identifies some key changes in spending and provides insights into the aged care package, Indigenous health and private health insurance.


Charles Maskell-Knight writes:

Last week I set out the forward estimates for aged care and health from the 2020-21 Budget Statement 6, and suggested that these should be the benchmark for assessing the 2021-22 Budget.

The table below compares the estimates from the 2021-22 Budget with those from last year.

The headline issue is of course the increase in aged care funding. The Department of Health Budget pack indicates increased spending of $17.7 billion: $250 million in 2020-21, $2.1 billion in 2021-22, $4.4 billion in 2022-23, and $5.5 billion in subsequent years.

The difference between these figures and those shown in the table above drawn from Budget Statement 6 may reflect some expenditure being included in the support for seniors sub-function rather than aged care, as well as funding for increased access to health services by aged care recipients being included in the health function. A closer review of the numbers is needed to get to the bottom of this.

The other major increase in funding relates to the health services function, where increased spending in 2021-22 largely reflects the ongoing impact of COVID. The increase in MBS funding also appears to include some COVID hangover, as well as increased spending on items included in the women’s health announcement of 9 May, elements of the mental health package, and a number of MBS review recommendations.

What is surprising is the continued flat spending on the private health insurance rebate. The measure to freeze the income thresholds for different levels of the rebate was supposed to end in 2020-21, but it has been continued for another two years.

There is really nothing else to say about Indigenous health. Expenditure in 2021-22 will be $5 million more than this year – a real decline. This reveals a lot about the Government’s priorities.

The total additional funding for Indigenous health is less than the funding for pre-implantation genetic testing for the 40,000 women undergoing IVF each year.

Join the discussion

Croakey will continue to cover the reaction to the Budget both here and on Twitter using the #Budget2021Health hashtag.

Join our #CroakeyLIVE discussing the health impacts of the Budget on Friday, May 14 from 1.30pm-2.30pm AEST.

Register here.


See Croakey’s articles on #Budget2021Health.

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