Victoria’s hospital budgets are being squeezed as the state grapples with spiralling debt and cuts to spending. The most recent state budget predicted that by 2028, taxpayers will be paying more than $25 million a day in interest repayments alone.
Thomas was asked four times on Thursday whether hospitals would have to wind back services as a result of her government’s demand for savings.
She declined to rule out bed closures or elective surgery cancellations, but did insist she had not asked hospitals to slash patient care to rein in spending.
“There’s a lot of fearmongering and politicking going on at the moment,” Thomas told ABC radio.
“Right now, we are asking our health services to look at their budgets, to negotiate their upcoming budgets with my department, and to look at where they can streamline that spending.”
Thomas said the negotiations with health services were designed to create a sustainable health system. “The message is very clear: it’s time to get rid of waste and duplication,” she said.
Health Minister Mary-Anne Thomas.Credit: Justin McManus
“It’s time to take a hard look at the number of executives, the number of communications and marketing people, [and] whether or not it’s really necessary to travel overseas for professional development.”
In the email to Alfred Health staff – obtained by 3AW radio presenter Neil Mitchell – Way said the health service had already stopped its additional surgery capacity.
He said it was looking at all spending, including management costs and back office and corporate activities.
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“We are doing everything in our power to minimise impact on patients, the education we provide to you and our future workforce and of course the research that will find cures for the future,” Way wrote. “But there are no exemptions.”
An Alfred Health spokesperson said it was continuing to work with the Department of Health to finalise the 2024-25 budget for the health service.
“Recognising the difficult budgetary environment, we are reviewing all aspects of our activities including corporate and back-of-house services,” they said on Thursday.
“Our priority is to minimise impact on patients and support our dedicated staff.”
One Labor minister, speaking on the condition of anonymity to detail confidential discussions, said the squeeze on hospital budgets was not a major cause of concern around the cabinet table.
“We will always win on health,” the minister said. “Hospitals should be financially responsible … not just spend more money than they are allocated.”
Opposition Leader John Pesutto said the elective surgery reductions showed the seriousness of Victoria’s financial woes. “Lives will be put at risk because of the severity and savageness of these budget cuts,” he said.
On Thursday, Premier Jacinta Allan backed Thomas, insisting that no final decisions had been made regarding public hospital budgets for the new financial year.
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“So any speculation is just that – speculation – and fearmongering,” Allan said. “Particularly by Liberal politicians who only know one line when it comes to the hospital system, and that is to cut and close.”
Another Labor source, speaking on the condition of anonymity to discuss internal matters, said it was better to have a fight with hospital chief executives now than on the eve of the next state election. Victorians are due to go to the polls in late 2026.
In May, The Age revealed that support for Labor had slumped to its lowest point in years under Allan’s leadership amid ballooning debt, infrastructure delays and broken promises.