The adjusted health levy will still add value to the ACT Budget across the forward estimates, but not as much as the original plan. Photo: Michelle Kroll.
The renegotiated health levy may cost the ACT Budget in the short term, but it will ultimately deliver $30.7 million across the next four financial years.
The 2025-26 ACT Budget included a flat $250 levy, described as a ‘health levy’, on residential, commercial and rural property owners for four years to cover a shortfall in health funding. It was expected to generate nearly $206 million.
It immediately drew the ire of the ACT Greens. The party ended up striking a deal with the ACT Government to instead add a $100 health levy for residential and rural properties, $250 for commercial properties, and a fixed 8.75 per cent payroll tax to firms with national wages above $150 million (except for universities with an ACT campus), from 1 January 2026.
Treasurer Chris Steel updated a Legislative Assembly committee on exactly how the changed health levy will impact the budget bottom line.
“The combination of these proposals will see a reduction in general rates revenue alongside an increase in payroll tax revenue compared to the [published] 2025-26 Budget estimates,” he wrote.
The health levy reduction and new payroll tax will cost the 2025-26 ACT Budget $12 million for the current financial year, but will ultimately add $30.7 million across the forward estimates.
The government was questioned about the health levy during estimate hearings, including whether it planned on legislating the levy to allow the Legislative Assembly to insert a sunset clause to ensure it is terminated after four years.
Finance Minister Rachel Stephen-Smith assured members that while there was no intention to legislate the levy, it would not be around forever.
“It is a temporary budget measure … to address a short-term financial challenge, and a short turnaround time as well,” she said.
Mr Steel added it “wasn’t quite true”, the levy hadn’t been legislated, and while it wasn’t an amendment that the Assembly could act upon, it was an instrument being adopted.
“We will review all revenue lines, including the health levy, in each budget [for the next four years],” he said.
Mr Steel also included in his letter how scrapping the $11 Working with Vulnerable People (volunteers) registration fees would change the budget.
The fee had been expected to collect $154,000 in 2025-26, and a total of $888,000 across the forward estimates.
“The intent of the fee was to have offset some of the costs associated with administering the fee,” Mr Steel wrote.
“Not proceeding with the fee will see a reduction in revenue collected by Access Canberra compared to the 2025-26 Budget estimates.”
The scheme will be reviewed with VolunteeringACT and ACTCOSS to examine how the scheme can sustainably maintain the support it provides to the community sector.
