National Cabinet Signs New Five-Year Health Reform Agreement

National Cabinet has signed off on a new five-year National Health Reform Agreement, concluding more than a year of negotiations between the Commonwealth, states and territories. The agreement delivers a significant funding boost for public hospitals and introduces major structural changes to disability and early intervention supports.

Under the agreement, the Commonwealth will provide $25 billion in additional funding for public hospitals, representing three times the level of funding committed under the previous five-year arrangement. Total Commonwealth funding for public hospitals is set to reach a record $219.6 billion between 2026–27 and 2030–31.

The agreement also includes funding and policy changes affecting the National Disability Insurance Scheme (NDIS) and the delivery of foundational disability supports. From 1 July 2028, state and territory contributions to the NDIS will be aligned with actual scheme growth and capped at 8 per cent. National Cabinet has also agreed to slow annual NDIS cost growth to a target range of 5–6 per cent.

A key component of the reforms is the Thriving Kids Program, the first phase of the new Foundational Supports model. Announced in August last year by Commonwealth Health Minister Mark Butler, the program is designed to support young children with mild to moderate developmental delay or autism outside the NDIS framework. Children with permanent or significant disability and high support needs will remain eligible for the NDIS.

The Thriving Kids model has been informed by an advisory group led by Minister Butler and Professor Frank Oberklaid, as well as a House of Representatives committee inquiry chaired by Dr Mike Freelander and Dr Monique Ryan. States and territories have committed to matching the Commonwealth’s $2 billion contribution to deliver the program.

While initially expected to commence earlier, the rollout of Thriving Kids has been delayed. The program will now begin on 1 October 2026, with full implementation scheduled for 1 January 2028.

The Commonwealth is yet to quantify the anticipated NDIS cost savings associated with the introduction of Thriving Kids. These details are expected to be outlined in the 2026–27 Federal Budget, to be handed down on 12 May 2026.

Optometry and allied health stakeholders are closely monitoring the reforms, with further analysis to focus on the implications for early intervention services, disability supports, and equitable access to eye health and vision care as additional detail emerges.