The Victorian Healthcare Association (VHA) has today welcomed a $31 billion investment in healthcare delivered in Victoria’s State Budget 2025-26, and looks forward to more detail on how this funding will flow through to the publicly funded healthcare sector.
VHA CEO Leigh Clarke said this funding provides a good foundation for our health system to deliver high-quality care right across the Victorian community.
‘We are pleased to see this investment, which provides year on year funding for hospital and health services and will go some way to addressing the structural deficit, particularly with rising demand for care and health services across Victorian communities.’
‘While the Victorian State Budget increases funding for healthcare, we would like to see more detail on how this will flow through to the individual hospital budgets. Services across the state, including metropolitan, regional and small rural services, have slightly different funding arrangements and we expect clarity on this in the weeks ahead.’
Ms Clarke noted that the healthcare system is made up of more than just hospital-based services and these also require sustained investment.
‘There is a missed opportunity in this Budget to increase funding for Victoria’s Community Health Services – which deliver health prevention, promotion and early intervention services and provide a vital pathway for care that communities would not otherwise have.’
‘Funding to deliver on the recommendations of the Royal Commission into Victoria’s Mental Health System is warmly welcomed, including $23 million to expand the Mental Health and Wellbeing Locals – which was delayed last year due to workforce shortages. We look forward to seeing where the 7 Locals will be placed and the opportunity for Community Health Services to partner on delivering these.’
Ms Clarke said the capacity of the Victorian Virtual Emergency Department (VVED) will be tripled – to respond to up to 1800 telehealth calls a day, as a result of $400 million boost to funding over 4 years. This will release pressure on Victorian emergency departments and streamlining access to healthcare for the community.
‘The VVED is a vital initiative which plays a key role in rural and regional areas by reducing the need for non-urgent transport and regional hospital admissions. It valuably contributes to addressing workforce shortages – including shortages of GPs across the state – and improves accessibility to care.’
‘We look forward to more detail on how the sector will leverage this funding, in particular Small Rural Health Services, Community Health Services and Victorian Bush Nursing Centres that rely on sufficient digital infrastructure to effectively use the VVED.’
Further, Ms Clarke noted that Victorians living regionally rely on fit-for-purpose aged care infrastructure, and the VHA would like to have seen more funding to support services to deliver the new right-based Aged Care Act on 1 July.
‘It’s positive to see some investment in public sector residential aged care (PSRACs), with funding to assist services in meeting nurse-to-patient ratios and prepare for legislative changes.’
‘However, aged care infrastructure spending falls short of the investment required – particularly for services in regional and rural areas, with $7.5 million allocated to minor capital infrastructure. This is significantly lower than the $80 million in targeted funding we had called for and highlights a gap for PSRACs who are facing growing demand for high-quality care against a looming 1 July date for commencement of the Aged Care Act.’
Looking ahead, Ms Clarke noted the opportunity around the formation of Local Health Service Networks on 1 July to deliver on its intended aim of increasing access to care, closer to home.
‘Today’s Budget demonstrates the Victorian Government’s commitment to supporting a healthcare system that improves health outcomes for all Victorians. We look forward to more detail in the days and weeks ahead on how services will be able to deliver on these announcements to provide high-quality care.’
Key points
$9.3 billion additional investment over 4 years for hospital operating expenditure.
$643 million for new and expanded hospitals, including to complete new and upgraded hospitals in Footscray, Frankston, Maryborough; community hospitals in Craigieburn, Cranbourne and Phillip Island; and expansions for regional and rural hospitals in Albury Wodonga, Geelong and Swan Hill.
$436.7 million to expand the Victorian Virtual Emergency Department (VVED), tripling the capacity of the VVED which will be able to respond to up to 1800 calls a day, up from 600.
There is no specific funding for Local Health Services Networks included in the budget, which will stand up on 1 July, and we expect that this will become visible over the coming weeks.
$23 million to support the establishment of 7 Mental Health and Wellbeing Locals and $10 million to improve the quality and amenity of mental health and alcohol and other drugs facilities.
$497 million to improve mental health services, with $309 million to maintain and operationalise new mental health beds, $126 million to support specialist mental health support programs including support for children and young people.
$10.7 million for Alcohol and other Drug (AOD) initiatives, which includes support for the delivery of pharmacotherapy services across Community Health Services and strengthen access across the community.
$7.5 million in capital renewal infrastructure funding for Public Sector Residential Aged Care Services (PSRACs).
For further information contact:
Primary contact
Toli Papadopoulos, Public Affairs Advisor
0408 851 302
Secondary contact
Tanya Vieyra, Manager Communications & Engagement
0400 515 444