The Federal Government of Australia will spend more than $430m to target diabetics and to help them manage their health and keep them out of hospital.
The funding will be given to doctors who take on diabetic patients and provide a personal care programme to make sure the patients stay healthy.
Prime Minister Kevin Rudd said more than 4,000 GPs will sign up to the $436m programme, which will begin in 2012.
"In 2007-08, around 237,000 hospital admissions were related to complications from diabetes that could have been avoided through better management," said Rudd.
Doctors will be paid $1,200 a year for every diabetic patient they treat, with an extra $10,800 a year to be given to the practice if their patients' health improves, according to abc.net.au.
The government will take over 60% of hospital funding by taking back 30% of goods and services tax revenue from the states and it has also promised $632m to train more than 5,000 doctors and specialists.