The Government plans to cut $110 million from the Health Budget during the financial year 2011-12. As a consequence of a deduction in the annual health budget, Royal Hobart Hospital (RHH) had to dismiss 100 doctors and nurses working in their hospital.

The health authorities have asked RHH to generate a savings of $38.5 million and two other hospitals of the region were deducting their budget by total $27 million, this year. As per Federal Independent MP Andrew Wilkie, these deductions will be disturbing Hobart. "It's easy to come to places like this and slice great big sections off the Budget, it's easy for politicians to do, but it's a complete abandonment of their responsibility to focus on the public interest”, said Mr. Wilkie.

The Launceston General Hospital needs to cut more than $16 million, while the North West Regional Hospital at Burnie was facing deductions of $11 million. As per a report, $8.6 million will be cut from primary health services, which include community health centres.

According to Tim Jacobson of the Health and Community Services Union, in order to meet the limited budget, drastic reductions were necessary to be made by the hospitals in the region. The deduction was also going to affect the quality of services provided by the hospitals.