Extra health funding handed to the states during the height of the COVID pandemic will continue until the end of the year, with new Prime Minister Anthony Albanese bowing to demands from the states for the money.
Going into the first national cabinet meeting since Mr Albanese's election, state and territory leaders were united on continuing the special funding.
The Prime Minister had talked down the prospect of continuing a 50:50 split in hospital funding between the states and the Commonwealth, which was due to expire in September.
The three months of extra funding for COVID-related expenses will cost the Commonwealth an additional $760 million.
Mr Albanese said national cabinet's agreement was not just about funding, but also reforming the health network to get people out of emergency departments who didn't need to be there.
"Our hospital system at the moment has people [in emergency departments] who should be being looked after by their local GP," Mr Albanese said.
"The lack of nurses and health professionals in the aged care system means that many people who should be either being looked after at home or looked after as aged care residents end up in the hospital system as well, putting further pressure on the system.
Premiers cheerful at 'refreshing' new national cabinet
NSW Premier Dominic Perrottet said it had been a "refreshingly" collaborative meeting.
"This is something we have been discussing at national cabinet for some time, so to have the first meeting today and for this matter to be resolved in some degree to be extended to December, I think is incredibly welcome and supported by every state premier and chief minister," he said.
Mr Albanese said the extended funding was recognition that the pandemic was not over.
"Clearly the decision that we made today to extend the funding is a recognition that there are currently around about 3,000 people in hospital as a result of COVID," he said.
"It is still having an impact."
Victorian Premier Daniel Andrews said he was grateful "politics was put aside" for the funding agreement, and national cabinet had "put patients first".
National cabinet has agreed to meet four times a year, as it moves away from its pandemic war footing.
