Tasmanian Health Department Directed to Find $702 Million in Savings

The Tasmanian state budget directs the Health Department to achieve $702.61 million in spending reductions over four years, including $131.45 million in the first year. Treasurer Eric Abetz set the target as part of a $1.47 billion operational efficiencies program across the public service.

Health Department expenditure is projected to rise from $3.66 billion in 2026-27 to $3.87 billion by 2029-30. The planned 7.8 per cent growth rate falls below Treasury's 11 per cent inflation forecast for the same period.

The department plans to meet the savings target through improved cost recovery, reduced locum and agency staffing, and a smaller executive structure. Additional steps include consolidating office space and cutting communications and travel expenses.

Spending on locum nurses reached $105 million in 2024-25, a 600 per cent increase over five years. Officials stated that lowering reliance on temporary staff remains a budget priority.

The Australian Medical Association said the expenditure targets do not reflect current patient demand. Its representative noted that annual demand growth of six per cent and health-sector inflation between four and eight per cent make the savings goals difficult to achieve without affecting services.

The Australian Nursing and Midwifery Federation Tasmania said the targets show a disconnect between budget assumptions and existing system pressures. Its secretary warned that workload increases could result if non-frontline positions are reduced. Labor's health spokesperson said the figures appear in the budget documents and called on Health Minister Bridget Archer to clarify the department's position.

A state government spokesperson noted that the government had previously covered additional demand while awaiting federal funding certainty under the National Health Reform Agreement. The federal government has committed an extra $527 million to Tasmanian health services over three years.

Officials said some of these funds may offset state budget pressures rather than expand services.