As part of the broader health and National Disability Insurance Scheme (NDIS) deal brokered between the Commonwealth and the States and Territories, the Commonwealth Government have agreed to extend the No Worse Off Guarantee by three years to provide the States and Territories with certainty in their coming budgets.

GST revenue guarantee

National Cabinet met in Canberra on 6 December 2023 and agreed to extend the GST No Worse Off Guarantee in its current form for three years from 2027-28.

“This will ensure GST proceeds are shared fairly and equitably, providing funding certainty for states,” said Prime Minister Anthony Albanese in a media release.

The Commonwealth will also launch a Productivity Commission inquiry to be completed by the end of 2026 into whether GST arrangements are operating efficiently, effectively, and as intended.

Strengthening Medicare

In relation to healthcare, the State and Territories have agreed to a further $1.2 billion package of measures to take pressure off hospitals.

The Commonwealth will:

  • Fund and implement, with States and Territories, the health-related recommendations from the Independent Review of Health Practitioner Regulatory Settings (Kruk Review)
  • Boost funding for Medicare Urgent Care Clinics; and
  • Supporting older Australians through avoided hospital admission and earlier discharge from hospital

National Health Reform Agreement

National Cabinet also endorsed Commonwealth increasing National Health Reform Agreement contributions to 45 per cent over a maximum of a 10-year glide path from 1 July 2025, with an achievement of 42.5 per cent before 2030.

National Cabinet endorsed the current 6.5 per cent funding cap being replaced by a more generous approach that applies a cumulative cap over the period 2025-2030 and includes a first year ‘catch up’ growth premium.

Health Ministers will also commence the renegotiation of the National Health Reform Agreement (NHRA) Addendum to embed long-term, system-wide structural health reforms, including considering the NHRA Mid-Term Review findings.

National Disability Insurance Scheme

National Cabinet acknowledged the need for reforms to secure the future of the NDIS, ensuring it can continue to provide life-changing support to future generations of Australians with a disability.

As an initial response to the NDIS Review co-led by Professor Bruce Bonyhady and Lisa Paul, National Cabinet agreed to work together to:

  • Implement legislative and other changes to the NDIS to improve the experience of participants and restore the original intent of the scheme to support people with permanent and significant disability, within a broader ecosystem of supports.
  • Adjust State and Territory NDIS contribution escalation rates, increasing from 4 per cent to be in line with actual scheme growth, capped at 8 per cent, with the Commonwealth paying the remainder of scheme costs growth, commencing from 1 July 2028.

The National Cabinet agreed to jointly design additional Foundational Supports to be jointly commissioned by the Commonwealth and the States, with the work oversighted by the First Secretaries Group. Additionally, the Council of Federal Financial Relations (CFFR) will oversight costs of the reforms and report to National Cabinet.

An initial tranche of legislation will be introduced into the Commonwealth Parliament in the first half of 2024, with rule changes phased in as developed.

The delivery of Foundational Supports would look to be delivered through existing government service settings where appropriate (for example, child care, schools), phased in over time.

Funding would be agreed through new Federal Funding Agreements, with additional costs split 50-50, and final details to be settled through CFFR.

The Commonwealth agreed to cap an additional expenditure for States and Territories on new foundational disability services to ensure the combined health and disability reforms will see all states and territories better off.


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