The 2026-27 Victorian State Budget provides targeted support to sustain our healthcare system now and into the future. We are pleased to see the Victorian Government has committed to future-proofing healthcare amid a tight fiscal environment. This budget takes a step closer to delivering accessible care in an innovative way, creating more pathways into care and care provided closer to where people live.

 
The VHA has today welcomed a $32 billion investment in healthcare in the 2026-27 Victorian State Budget, and looks forward to further detail in the weeks ahead on what this means for Victoria’s public healthcare system.

VHA CEO Leigh Clarke said the Budget takes a positive step forward towards future-proofing healthcare. 

‘Many of today’s announcements align with what we called for across our Victorian State Budget submission and Victorian Health Investment Strategy. In particular, we note the emphasis on:

• New service models with the expansion of the Virtual Hospital Pilot and specialist advice pilot to assist in increasing system access.
• Investment in prevention and early intervention, particularly through Victoria’s Registered Community Health Services delivering community based chronic disease care
• Investment over 4 years to realise the benefits of Network collaboration across our hospital system.
• A renewed approach to infrastructure investment, focused on the sustainability of existing infrastructure, including maintenance and capital repairs and investment in the Regional Health Infrastructure Fund and Metropolitan Health Infrastructure Fund. 

These investments will enable the system to deliver the essential care and services Victorians require now and into the future. 

‘Right across the state, health services are leading delivery of new and innovative models of care, such as the state’s first Virtual Hospital. It is pleasing to see commitments that continue to deliver innovation and invest in new pathways for access and care. Today’s commitments support Victorians in accessing the services they need in the most appropriate setting, ensuring acute care is used by Victorians that need it the most.’ 

However, the Budget is a missed opportunity to prioritise an increase in funding for prevention and early intervention and supporting our Community Health Services with a much-needed uplift in core funding. Community Health and Bush Nursing provide critical and accessible care to their communities, while operating with rising demand and complexity of services across Victoria, yet funding has not increased over a significant period.

Further, funding for mental health, particularly in providing appropriate Mental Health services for Aboriginal people through initiatives such as the Healing Centres has been overlooked. 

Digital infrastructure including Electronic Medical Records (EMR) and supporting interoperability across the system have had minimal presence in the budget. This leaves a gap in supporting patient flow and is a critical enabler to assist the Local Health Service Networks in achieving their objectives.

Whilst overall the budget is sustainable and positive, we know that there is growing demand for services. The VHA will be watching closely as individual health service model budgets land in June to ensure that the activity targets of each hospital and health service meet the needs of their communities. 

‘The investment across healthcare is welcome, and in this election year we would like to see all political parties commit to prioritising the care that matters to Victorians. Accessible care, when and where it is needed. To achieve this, investment is needed to deliver innovation, across all elements of the sector.’

‘We acknowledge the focus on sustainable infrastructure and the move to provide clear investment in maintenance and upgrading critical infrastructure, operationalising new hospitals and providing for equipment upgrades. Our Victorian Health Investment Strategy highlighted the need to take a system-wide view of Victoria’s health infrastructure pipeline, looking beyond short-term grant funding. We would like to see a commitment towards a Strategy and plan for our state to ensure infrastructure investment is aligned to community demand.’

Looking towards the next four years and beyond, Ms Clarke said the 2026 Victorian State Election presents an opportunity for the next Government to leverage existing reforms, innovation and collaboration.

‘As a sector representing one-third of the current state Budget, the VHA would like to see a forward-looking approach that prioritises prevention and early intervention, sustainable and long-term funding cycles, strategic workforce and infrastructure planning and digital reform and innovation.’

Key points

• Commitment to new service models: $3.1 million to expand Victorian Virtual Hospital pilot across regional Victoria, led by Austin Health and Royal Melbourne Hospital.
• Improving care closer to home: $67.4 million to deliver hospital-level care in patient homes across 47 health services.
• Investment in prevention and early intervention: $21.2 million for the community-based chronic disease program and $31.7 million for alcohol and other drug community supports
• Realising Network collaboration: $49 million to enhance sector collaboration across the LHSNS
• Sustainable infrastructure: $152 million for sustainable investment in maintenance, uplift and existing programs.
• Aged care: $35.7 million to strengthen public sector residential aged care support delivery of high-quality care across Victoria.
• Workforce: $40.3 million to support health workforce sustainability, including additional graduate, nursery and midwifery positions, Aboriginal Cadet and Scholarships and Mental Health training pipelines. 

For further information contact:

Toli Papadopoulos, Senior Public Affairs Advisor | 0408 851 302 | toli.papadopoulos@vha.org.au