A federal budget measure could see natural therapies excluded from private health insurance rebates unless there is clear evidence they are clinically effective.

A review into the "clinical efficacy, cost effectiveness, safety and quality" of natural therapies was announced in the budget handed down by Treasurer Wayne Swan on Tuesday.

Natural therapies found to be clinically ineffective will be cut out of government-funded private health insurance rebates.

Treatments including homeopathy, aromatherapy, ear candling, crystal therapy, flower essences, iridology, kinesiology and naturopathy could be found ineligible.

Professor Ken Harvey from La Trobe University's School of Public Health welcomes the announcement.

"It is excellent to review complementary medicines to see whether there is sufficient evidence to subsidise them under private health insurance," he told ABC News Online.

"If there is no good evidence that they are better than a placebo, then they should not be funded by the taxpayer."

He says evidence for some natural therapies is controversial and contradictory.

"There really is no scientific validation for the homeopathic medicines or the principles - that something diluted down becomes stronger, or that you treat someone with a dose of something that produces the same symptoms," he said.

"I have no problem with people going to a homeopath if they think that that is appropriate and they have got full knowledge of the limitations, but they should be paying for it themselves."

'Bit of a shock'

However, Australian Traditional Medicine Society president Dr Sandi Rogers says the announcement came as a surprise.

"It's a little bit of a shock when we as a profession have not been consulted," she said.

"If this cost-cut is saying 'we don't want to spend taxpayer's money on natural medicine', I would be very concerned."

Dr Rogers says about 23 per cent of clients at her two practices access private health insurance rebates.

"Approximately 70 per cent of the Australian consumer market is spending billions of dollars each year on natural medicine out of their own money," she said.

"If natural medicine didn't work, then why do consumers keep coming back for more?"

Dr Rogers says she is not worried about losing clients.

"If health funds give $15 out of $60 or $70, I really believe the consumer is not going to take that to say 'I won't see my natural medicine practitioner'," she said.

"We would just like a fair playing field."

But Professor Harvey says natural therapies need to be scrutinised.

"There is quite a rigorous process in the Pharmaceutical Benefits Scheme (PBS) to make sure that the only medicines that get subsidised have got evidence of not just effectiveness, but cost-effectiveness," he said.

"As with the PBS, public money should only go to those classes of therapies that have got reasonable evidence to support them."

Other treatments, including acupuncture, chiropractic, Chinese medicine, optical, midwifery, mental health nursing, physiotherapy, podiatry, psychology and speech pathology will not be affected.