Australian Healthcare: 2026-27 Federal Budget: Expanding public health services

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Australian Healthcare: 2026-27 Federal Budget: Expanding public health services

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Australian Healthcare

2026-27 Federal Budget: Expanding public

health services

Industry Overview

Health spending (2026-27) 12 May 2026

The Australian Federal Government has unveiled its 2026-27 health budget, which Equity

includes public hospital funding ($25b/5 years), cheaper medicines ($6.5b), and Australia

strengthening Medicare ($3.5b). In our view, this budget moves Australia away from Healthcare

privately funded healthcare towards greater public dependence on Medicare, the Lyanne Harrison >>

Pharmaceutical Benefits Scheme (PBS), and public hospitals. Key points and implications Research Analyst

for our covered companies are as hollows. Merrill+61 2 9226Lynch5028(Australia)

lyanne.harrison@bofa.com

Public hospitals Elizabeth Davies >>

$25b funding for public hospitals is aimed at increasing capacity and reducing waiting Research Analyst Merrill Lynch (Australia)

lists. Covered company implications: Further public hospital funding is a headwind for +61 2 9226 5078

private hospitals, such as Ramsay (RHC), which are already under pressure from lower elizabeth.davies2@bofa.com

volumes. In addition, the budget’s planned reduction in private health insurance (PHI)

rebates for Australians over 65 years old may reduce PHI participation, adding further

volume headwinds.

Pharmaceuticals

$6.5b PBS funding for pharmaceuticals should provide Australians with more medicines

and at a lower cost. Covered company implications: Increased access to a broader

range of lower-cost medicines should support wholesale revenues for Sigma (SIG) and

EBOS (EBO) as well as increase foot traffic through retail pharmacies.

Medicare access and expanding bulk billing