30 June 2025
Victorian State Budget leaves teeth hurting
In the recently announced 2025–26 Victorian State Budget, there were no incentives to support dental practices specifically and investment in public dental services has not significantly increased against an already woefully inadequate baseline.
Members with small businesses will continue to benefit from;
- Energy Bill Relief: Eligible small businesses can receive rebates of up to $800 through the Energy Bill Relief Fund, helping to reduce operational costs. (alp.org.au/news/more-tax-relief-for-small-businesses-under-labor)
- Instant Asset Write-Off: The government has extended the $20,000 instant asset write-off, allowing small businesses to immediately deduct the cost of eligible assets, such as dental equipment, thereby improving cash flow (ministers.treasury.gov.au/ministers/julie-collins-2022/media-releases/albanese-labor-government-support-small-business-passes)
- Small Business Energy Incentive: This initiative assists small businesses in upgrading to energy-efficient appliances, which can lead to long-term savings on energy bills.
In the public sector, demand continues to outstrip capacity and wait times remain clinically unacceptably long (in some areas, eligible people wait over three years for general care). Potentially preventable dental hospitalisations continue to rise (18,591 people between 2022-2023, up by more than 2000, including children having teeth extracted due to poor oral health) and the community’s oral health outcomes are worsening — particularly among vulnerable populations, resulting in avoidable pain, reduced quality of life, and increased strain on the broader health system.
“The lack of investment in this vital service is not only the result of the state’s current financial predicament”, says CEO, Ilsa Hampton. “This is a longstanding problem that has created intergenerational issues. We are continuing our sustained advocacy to discuss cost-effective ways to turn this story around, such as a statewide oral health campaign focused on prevention. The last time an oral health campaign was run in this state was by the Milk Board in the 1970s followed by Dental Health Services posters in 1985. Fifty years of neglect needs to be addressed as a matter of urgency.”
As part of our advocacy work, we are reiterating our call for increased and sustained investment in:
- Public dental services, especially wages of Victorian dentists which are below other states by 30%
- Private practices, including payroll tax back-taxes and penalties
- Oral health workforce development
- Preventive care and early intervention
While the Victorian Government has announced a 2.3% increase in dental expenditure for the upcoming financial year, this figure should be considered in context. In 2024–25, the actual spending on dental services exceeded the original budget by approximately 35%. As a result, despite the apparent increase, the 2024–25 allocation is around 25% less than last year’s actual spend. Specifically:
- Dental Health Services Victoria (DHSV) reported a budget of $182.1 million for 2024–25, plus $24.8 million from the Federation Funding Agreement for Public Dental Services for Adults, totalling $206.9 million.
- The Department of Health listed a total allocation of $213.4 million.
- Actual spending for 2023–24, however, reached $292.4 million, creating an unexplained shortfall of $85.5 million in this year’s budgeted allocation.
The FFA (Federation Funding Agreement) remains stagnant and is likely to contribute approximately $24.8 million as was indicated last financial year. This level of funding continues to represent a significant decrease from pre-Covid budgets (namely a 35% reduction per client in CPI adjusted terms) and with little to no change in targeted outcomes. Critically, workforce shortages are also undermining service delivery.
Local evidence suggests that remuneration and clinical autonomy were two of the most commonly cited reasons that people leave the public sector. Despite trying to significantly uplift wages through the EBA negotiations, the Victorian Government’s Wage Policy stifled our efforts to achieve pay parity with employee dentists in the New South Wales public dental service.
A recent costing undertaken by the Victorian Parliamentary Budget Office found that just $12 million would be required to bring Victorian public dentists’ wages into parity with their New South Wales counterparts. We would anticipate this modest investment would improve workforce attraction into our public dental system — a necessary step to ensure long-term system viability.
The majority of front-line dental care in the state is provided by small businesses, whose patients are struggling with cost of living and where businesses are struggling with increasing costs. Dental practices’ financial sustainability is essential to ensuring ongoing access to care for the Victorian public. We are disappointed that the government has not found a way to provide some relief in the form of state subsidies for patients and/or assistance with the costs of doing business in primary care contexts.
The Government is reliant on the private sector to continue to meet its service delivery targets through three Victorian Dental Voucher Schemes and we have highlighted in a recent feedback report that the Government needs to improve these to improve the quality of care through the schemes as well as the incentives for private providers to participate.
We continue to urge the Government to consider our call for increased and sustained investment in public dental services, oral health workforce development, and preventive care in addition to targeted support measures for health-related small businesses in future planning, such as state tax relief.
Dr Katy Theodore, ADAVB Advocacy Team Lead
Dr Laura Purcell, ADAVB Advocacy and Evidence Officer
