Albanese warns States that Commonwealth is ‘not an ATM’ ahead of crisis talks on hospital funding

Anthony Albanese has warned all States and Territories that the Federal Government “isn’t an ATM” ahead of crisis talks with the jurisdictions to secure an overdue deal on hospitals and disability funding.

Premiers and chief ministers joined the Prime Minister for dinner in Sydney on Thursday evening before National Cabinet on Friday to hash out a new five-year, multi-billion-dollar hospital funding deal.

Speaking in Cairns on Thursday, the PM reminded the States that striking a deal was in their best interest and said he “looked forward to a constructive relationship”.

“It’s certainly in the interest of States and Territories for there to be that agreement. It certainly is in the interest of all Australians that that happen,” the PM said.

“We have put an offer to the States and Territories. I did that yesterday. We’ll continue to discuss it respectfully, but we have options as a Commonwealth as well, if there’s no agreement.

“We’re not an ATM, we have to make sure that we’re responsible going forward.

“We understand a number of State budgets are under pressure as well, but I’ve been having constructive discussions with State and Territory leaders.”

The PM will be hoping to end the impasse which prompted Band-Aid extensions last year, especially with pressure mounting to do so before South Australia enters care caretaker mode on February 21 ahead of its State election.

All States and Territories rejected the previous offer put forward in December, with Queensland Premier David Crisafulli particularly staunch against it saying it should be significantly lifted by the Commonwealth.

While further details of the recent offer are yet to be released, Health Minister Mark Butler has described it as “generous” in his bid to push for a deal.

Grattan Institute health program director Peter Breadon said it would be disappointing if the parties don’t resolve the issue.

“It’ll be a big disappointment if we don’t get an agreement that both resolves the fight about money and provides a plan for the system, including reforms to make it more efficient and meet the challenges of rising demand,” he said.

“There’s been a lot of time and a lot of accusations. There’s a lot at stake, so my hope is they can get a real deal agreed.

“The Prime Minister’s concern about rising costs is totally understandable. But the right deal would fill the gap where the Commonwealth hasn’t stepped up to pay its fair share, while putting in place reforms that bring cost growth under control. It is also unreasonable to expect no strings attached funding.

“If we only focus on the money side, ‘how do we make the whole system work better? How do we shift care out of hospitals? How do we make hospitals more efficient?’ then we’re just setting ourselves up for this relentless renewal of federal fiscal fights without a reform plan to the system. That’s my fear.”

Labor will also be hoping for a smooth transition to its new “Thriving Kids” program this year, which aims to divert the growing number of children with autism or developmental delay off the ballooning National Disability Insurance Scheme.

Mr Albanese said he hoped to have greater insight on the potential success of Thriving Kids when asked on Wednesday about his confidence over the initiative’s ability to reduce the NDIS ballooning spending.

Mr Butler announced the new $2bn program in a National Press Club address on August 20 to shift children with mild to moderate developmental delays or autism off the $48 billion NDIS.

It will begin rolling out from mid-2026 and direct the cohort from the NDIS to State-run programs.

In 2023, the National Cabinet agreed to get growth down to 8 per cent as an “interim target”.

“I’m calling upon State premiers. They all know that we need to get NDIS spending under control. The NDIS is such an important project, it’s something that we should be really proud of as Australians,” Mr Albanese said.

“We think it certainly can get to where it is 8 per cent and can be got further down as well, so that it is sustainable.

“It was designed to ensure that people with disabilities get the care that they need. But we know that there has been some misuse of the system, and that’s why we want to make sure that it’s sustainable.

“So, the Thriving Kids program is important.”

It comes as States are also agitating over aged care funding. Mr Albanese used the appearance on Thursday to urge the States to “fix” their approvals systems, which he blamed for a lack of aged care beds.

“One of the things that state and territory governments need to do as well is to get on top of some of the planning approvals,” he said.

“There are great examples of an approval of extra aged care beds in particular communities that then can’t get approval from councils. They need to work and fix that.”