Albanese Government Offers Delay to $2bn Autism Scheme in Bid to Secure Hospital Funding Deal
The Albanese government has put forward a significant concession in ongoing negotiations with state and territory leaders, offering to delay the commencement of a major new autism support program. This move is designed to break the deadlock and secure a comprehensive funding agreement for hospitals and disability services across Australia.
Revised Timeline for Thriving Kids Scheme
At the heart of the proposal is a three-month postponement for the $2 billion Thriving Kids scheme. This early intervention program for autism services, which was originally scheduled to begin on 1 July, would now start in October under the revised offer. The delay comes in direct response to concerns raised by state governments, which indicated they were not yet prepared to assume responsibility for the foundational supports for young children that the scheme entails.
The Thriving Kids program is a cornerstone of efforts to manage the escalating costs of the National Disability Insurance Scheme (NDIS). It is specifically targeted at providing services for children under the age of eight who have developmental delays and other low to moderate support needs. These services are planned to be delivered through established community channels, including schools, health clinics, and local facilities.
Sweeteners and Funding Adjustments on the Table
In addition to the schedule change for the autism scheme, the federal government has tabled several financial incentives to encourage agreement from the states and territories. A key element is the provision of budget funding "adjustments" intended to benefit smaller jurisdictions, which are grappling with particularly acute cost pressures in health and hospital services.
The broader funding package under discussion is substantial. Health Minister Mark Butler and Prime Minister Anthony Albanese have offered $23 billion in new federal funding. This forms part of long-running negotiations aimed at increasing the Commonwealth's share of hospital funding to 42.5% by the year 2030, with a further rise to 45% targeted by 2035.
A further $2 billion in federal funds is earmarked to accelerate hospital discharge processes for elderly patients awaiting placement in aged care facilities. Recent estimates suggest over 3,000 individuals are currently stuck in hospital wards, waiting for a transfer to an aged care bed. The federal government projects that the entire deal will see its contribution to hospitals reach $216 billion over a five-year period starting from July 2026.
Path to Agreement and Underlying Pressures
Premiers and chief ministers are expected to consider this latest proposal at a meeting of the Council for the Australian Federation on Thursday, followed by the national cabinet meeting in Sydney on Friday. There is a growing expectation among multiple jurisdictions that a deal will be reached, even though concessions to smaller states may mean larger states receive a slightly less generous share of the additional federal money.
The push for this agreement is driven by significant fiscal pressures. Minister Butler has previously labelled the current 8% annual growth target for NDIS spending as "simply unsustainable" in the medium to long term. The government is seeking to lower this growth rate to between 5% and 6% in the coming years through national cabinet agreement.
Recent figures highlight the scale of the challenge: children under 15 make up 43% of the more than 717,000 NDIS participants, yet account for only 13% of all scheme payments. Furthermore, participants with autism or other developmental delays as their primary disability constitute half of all participants but just 23% of total payments.
While the Labor government had hoped to finalise this deal before Christmas, plans were disrupted by the emergency response to the Bondi Beach terror attack. In recent days, both Albanese and Butler have emphasised their commitment to good faith negotiations, describing their revised offer as a "generous" one aimed at securing a vital national agreement.
