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The 2016-17 Victorian State Budget - investing in the public health system

NewsFlash 28 April 2016

The Victorian State Budget, delivered yesterday by Treasurer Tim Pallas, announced significant increases in health funding in 2016-17 and over the forward estimates (2018-19 to 2019-20). The budget is aimed at providing Victorians with a “stronger and reliable health system” to meet demands from population growth.

Acute Health

$438m will be spent in 2016-17 on improving access to elective surgery and meeting hospital service demand, with $1.29b on these areas in the budget period (including Commonwealth contributions under the National Health Reform Agreement). These funds will be targeted to specific areas, including emergency department presentations, palliative care, sub-acute care and specialist clinics.

The Government claims that almost 200,000 Victorians will receive elective surgery as a result of this funding. 

Oversight, Quality & Safety

The budget includes measures which complement the response to the Investigation into Perinatal Outcomes at Djerriwarrh Health Service:

  • Around 30 rural and smaller health services will receive expanded maternity care training, including access to specialist training.
  • State-wide Maternity indicators will be rolled out, with mandatory reporting of those indicators to health service boards.
  • Incident reporting mechanisms will be strengthened.

Further details of these measures will be announced by Department of Health & Human Services (HHS).

Hospital Infrastructure

The budget includes a number of allocations for hospital capital works, including $169m for the Goulburn Valley Health (Shepparton Campus) expansion, $61.3m for infrastructure works at Footscray and Sunshine Hospitals, and $40.8m for works at The Austin Hospital.

$135m has been allocated to start work on the Victorian Heart Hospital, which will be the first stand-alone specialist heart hospital in Australia. $10m has also been provided for a new Breast Cancer Centre at Maroondah Hospital.

$17.3m has been allocated for a new day procedure centre at Broadmeadows to relieve pressure on The Northern Hospital, however Northern Health will not receive funding for its desired redevelopment of The Northern Hospital (estimated to cost $106m).

Ambulance services

The budget provides $143m for ambulance services, including $116m to expand availability of ambulance services and improve response times and $27.3m for vehicle and station upgrades.

The funding provided is also intended to support the State Government’s increased share of emergency helicopter costs.

Mental Health

Specific funding provided in the Budget includes:

  • Additional funding for clinical mental health services to respond to increasing demand, including new acute mental health beds ($127.3m over four years).
  • Trials at 6 sites of personal support services for survivors of suicide attempts, including follow-up for up to 3 months following hospital presentations following a suicide attempt ($27.5m over 4 years).
  • Funding for prevention and early detection of perinatal depression (replacing Commonwealth funding ceasing on 1 July).
  • Increased funding for Forensicare, especially support for high-risk patients in transitional and post-release environments.

Medicinal Cannabis

As previously announced, the Budget includes $28.5m to support the establishment of the Office of Medicinal Cannabis and an Independent Medical Advisory Committee, in advance of the commencement of the medicinal cannabis program in early 2017.

Real-time Prescription Monitoring

As announced earlier this week, Victoria will introduce real-time prescription monitoring for Schedule 8 medications from 2018.  The Budget provides $12.4m in 2016-17 to develop this program, with a total of $30m over the budget period.

Other budget provisions

Other allocations in the budget relevant to the health sector include:

  • A $200m Regional Health Infrastructure Fund, to invest in minor capital projects for regional health services.
  • $16.6m over four years for critical cancer control services.
  • $132m over four years for disability related initiatives, in advance of state-wide roll-out of the National Disability Insurance Scheme from July 2016.


The Budget indicates the State Government’s intention to invest in the public health system and to support health services to meet increasing demand. The funding provided to health services to meet increased demand is a significant increase on 2015-16 and is sustained over the budgeted period, however for many other health sector initiatives the funding significantly reduces in coming years. It remains to be seen whether the increased funding provided in the 2016-17 budget is replicated in future years, as demand continues to increase.

If you have any queries regarding the State Budget please do not hesitate to contact John Petts or Lachlan Rees.

John Petts, Partner

NewsFlash 28 April 2016
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