The AMA Tasmania Urges the Federal Government to Honour Funding Agreement

AMA Tasmania President Dr Michael Lumsden-Steel stated, “It is critical that the Federal Government steps up and pays its fair share of the rising costs of healthcare delivery.”

Tasmania’s health system is under immense pressure. Demand continues to outpace capacity, and the system is stretched beyond its limits. There is no surge capability, frontline staff are fatigued, and chronic underfunding has left little room for innovation or reform.

Dr Lumsden-Steel added, “We cannot expect efficiencies from a system already operating at breaking point. If governments claim they lack the funds to meet healthcare demand, then we must have an honest national conversation about increasing revenue. Otherwise, we risk accepting that patients will not receive timely, necessary care.”

Stabilising our health system requires the Commonwealth to shoulder its share of hospital funding. If that’s not feasible, then we need to explore sustainable revenue options. A comprehensive review of the tax system is essential, noting that past recommendations have been ignored for too long.

Across Australia, states and territories are grappling with financial stress and overwhelmed health services. In Tasmania, revenue collection from compensable patients is, frankly, unacceptable.

Our hospital workforce is stretched to the brink. Patients face excessive wait times for admission and elective surgery, leading to bed block and preventable adverse outcomes. The gaps in the system are widening, and the consequences are real, with prolonged suffering and delayed recovery.

“It’s time to stop papering over the cracks,” Dr Lumsden-Steel said.

Federal AMA President Dr Danielle McMullen echoed the urgency, “Hospitals are everyone’s responsibility. We must end the starvation diet and fund them to meet demand.”

Doctors stress that Tasmania’s health system must be built on robust demand modelling and led by specialists. The AMA calls for iron-clad commitments to future-proofed, purpose-built infrastructure, delivered by 2035, not 2050.

Repeated underfunding forces us to cut the cloth to fit a shrinking budget. 

Signing the National Health Reform Agreement and lifting the Commonwealth’s funding share would inject approximately $670 million into Tasmania’s health system.

Tasmania needs a new Royal Hobart Hospital by 2035, along with integrated IT and digital systems, a permanent healthcare workforce, and the essential staff to support clinical activity, as well as investment in preventative and public health. 

AMA Tasmania further reinforces that Tasmania is the ideal location for the Federal and State governments to get together, drive funding reform, trial the single funder model for healthcare, explore innovative models of care, and close the gaps between general practice and the hospital system.

As the oldest, sickest, and most decentralised state in Australia, Tasmania faces growing demand. 

Only a realistic, collaborative funding framework, where both levels of government pull their weight, can deliver the care Tasmanians deserve.

The financial risks are minimal, but the opportunity for transformation is enormous.

We need to be bold, innovative and reform healthcare delivery and healthcare funding.>>>ENDS