The Albanese government has abandoned plans to impose a $5,000 cap on allied health services for defence veterans, following widespread opposition from veterans’ groups, opposition parties, and crossbench senators. Veterans’ Affairs Minister Matt Keogh announced the decision on Thursday, saying the government had listened carefully to veterans’ concerns after consultations and would no longer pursue the proposed limit, which was due to take effect on July 1, 2027.
The cap was initially aimed at saving $748 million over three years from 2027-28, and $340.2 million annually thereafter, according to budget estimates. However, critics argued that the policy would have significantly restricted access to essential healthcare for veterans, particularly those with serious injuries or health conditions. Keogh reiterated the government’s ongoing commitment to improving allied health access and to implementing the recommendations of the Royal Commission into Defence and Veteran Suicides.
Veterans’ advocacy groups welcomed the government’s reversal. John Armfield, a former navy clearance diver and spokesperson for Fair Care for Veterans, praised the decision as an example of responsive governance. “Veterans, families and doctors came from all over the country to say one thing: this cap would only ever hurt the most badly injured,” he said. “The minister made the right call and he deserves credit for it.”
Independent senator Jacqui Lambie, who has been vocal in opposing the cap and has shared her own health challenges, described the government’s concession as a cause for celebration. “Have a great weekend. Have a beer. Have too many beers – do whatever. But the bloody cap has been scrapped,” Lambie said, highlighting the progress made since the Royal Commission’s findings were released. She also pledged to continue monitoring government actions to ensure such measures are not reintroduced.
Despite the concession, some critics remain unsatisfied. Liberal MP and veteran Phil Thompson called for Keogh’s resignation, condemning the government’s handling of veteran affairs as disrespectful and inadequate. Thompson’s motion of no confidence against the minister was unsuccessful but underscored ongoing tensions. Nationals frontbencher Kevin Hogan and Greens senator David Shoebridge also welcomed the reversal but criticized the government for delaying the decision. Hogan described the proposed cap as "cruel" and accused the government of being reluctant to respond to veterans' concerns.
The political backlash and pressure from veterans’ groups and crossbench senators appear to have been decisive in the government’s decision to scrap the cap. The announcement brings an end to weeks of debate and highlights the sensitivity surrounding veterans’ healthcare funding and access in Australia.