Prime Minister Finalizes $25 Billion Health Agreement with States and Territories in Last-Minute Negotiations

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Prime Minister Anthony Albanese has brought months of a stalemate to an end after striking a $25 billion health deal with the states and territories at the 11th hour.

The national cabinet met this morning to reach a new five-year funding agreement for public hospitals.

After a crucial meeting, Prime Minister Anthony Albanese announced that the federal government will contribute an additional $25 billion to public hospitals. This increment elevates the total funding to an unprecedented $219.6 billion over the forthcoming five years.

Australian Prime Minister Anthony Albanese met with the state and territory leaders. — Prime Minister Anthony Albanese met with the state and territory leaders. (Sam Mooy)

“We’ve achieved a landmark agreement to provide record funding for state and territory hospitals while ensuring the sustainability of the National Disability Insurance Scheme,” Albanese declared to reporters.

He emphasized the importance of this accord, calling it one of the most substantial national reforms in recent history. “These reforms will guarantee that Australians continue to receive world-class healthcare and disability support,” he assured.

Albanese highlighted that this new agreement brings three times more additional funding for public hospitals compared to the previous five-year deal.

Expressing gratitude, Albanese commended the state and territory leaders for their dedication in reaching a consensus, emphasizing the focus on patient care over political differences after what he described as a “long period of time.”

CANBERRA, AUSTRALIA - OCTOBER 07: Minister for Health, Disability and Ageing The Hon Mark Butler MP speaks in Question Time on October 07, 2025 in Canberra, Australia. Australia's parliament convened for sittings as a number of pressing issues come to the fore, from inflation and cost of living domestically to Australia's relationship with its allies in the region and beyond internationally. (Photo by Hilary Wardhaugh/Getty Images) — Federal Health Minister Mark Butler. (Getty)

The deal was $2 billion more than what Albanese offered in December, but the federal government was under pressure to reach an agreement today ahead of the South Australian government entering caretaker mode from February 21 for the state election.

Federal Health Minister Mark Butler had admitted there would not be enough time to secure a deal before the current funding agreement expired on June 30 if one was not reached today.

“I’ve said very honestly and clearly I think that the runway is getting shorter for a 5-year deal to be negotiated this side on 30 June,” he told reporters yesterday.

Under the 2023 agreement, the federal government agreed to increase its share of public hospital funding to 42.5 per cent by 2030 and 45 per cent by 2035 in exchange for the states and territories to help fund disability services.

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