Welfare spending generally aims to improve the social and economic wellbeing of the population. It is distinct from health spending in that it focuses on measures such as income support and social and economic employment-related programs and services (for example, unemployment relief and family and relationships services).
See the Australian Institute of Health and Welfare’s Health expenditure Australia series for more information on health spending.
Both the Australian Government and the state and territory governments contribute to welfare spending, as do non-government organisations and individuals. The Australian Government primarily contributes through cash payments relating to its areas of responsibility, as defined in the Australian Constitution (which include family allowances, unemployment benefits and pensions); it also contributes to certain welfare services. The states and territories focus more on providing welfare services.
Data on welfare spending that is funded by non-government sources (for example, where a welfare service is funded by donations or fees rather than through government funding) are not readily available in Australia and are not included here.
See Philanthropy and charitable giving for some information on non-government donations.
In 2019–20, government spending on welfare services and payments was $195.7 billion. The Australian Government funded the majority of this amount (88% or $171.5 billion), with the remaining 12% funded by state and territory governments.
About welfare expenditure data
Where possible, welfare spending estimates have been developed for consistency with the Australian Health and Welfare’s Welfare Expenditure Australia series of publications. This ensures trend data are consistent.
Constant prices and ‘real terms’
Spending is reported in constant prices (that is, adjusted for inflation) except where noted. The use of constant price estimates indicates what the equivalent spending would have been had 2019–20 prices applied in all years, as it removes the inflation effect. The phrase ‘real terms’ is also used to describe spending in constant prices. On this page:
- constant price estimates for spending were derived using deflators produced by the Australian Bureau of Statistics
- the Consumer Price Index was used for cash payments, and the government final consumption expenditure (implicit price deflator) for welfare services and tax concessions.
Comparability with other welfare spending estimates
To maintain historical comparability, the Youth Allowance (Students and Other), Austudy and the Aboriginal and Torres Strait Islander Study Assistance Scheme (ABSTUDY) are not included in the welfare spending estimates presented on this page. Therefore, these estimates are not comparable with figures reported elsewhere (such as in the Treasury Final Budget Outcome).
State and territory welfare expenditure
The most recent welfare expenditure data available for state and territory governments are for the 2015–16 financial year, as published in the 2017 Indigenous expenditure report (Productivity Commission 2017), which includes data for both indigenous and non-Indigenous welfare service expenditure. State and territory data were estimated for 2016–17 to 2019–20 using available trend data from the Indigenous expenditure report and from Government finance statistics (GFS) 2019–20, in which the Classification of the Functions of Government – Australia (COFOG-A) was used (ABS 2015, 2021b). In previous reports, the GFS was based on the older Government Purpose Classification (ABS 2005).
Hence, the estimated time series data on this page are not fully comparable with data published previously. Any additional spending on welfare services by the states and territories related to either the 2019–20 bushfires or the coronavirus 2019 (COVID-19) are also not visible in these data.
Sources of data
Data are sourced from the welfare expenditure dataset of the Australian Institute of Health and Welfare, which is, in turn, sourced from publicly available data from:
- the Australian Bureau of Statistics
- the departments of Education, Skills and Employment; Health; Prime Minister and Cabinet (PM&C); Social Services; the Treasury; Veterans’ Affairs
- the National Disability Insurance Agency (NDIA)
- the Productivity Commission.
Data for 2018–19 and 2019–20 are extracted from the corresponding reports of these organisations (ABS 2021b; Department of Education, Skills and Employment 2020, 2021; Department of Health 2020, 2021; Department of the Treasury 2021; Department of Social Services 2020b, 2021b; Department of Veterans’ Affairs 2020, 2021; NDIS 2021; PM&C 2020, 2021; Productivity Commission 2021).
In 2019–20, the Australian and state and territory governments spent $195.7 billion on welfare. In real terms (that is, adjusted for inflation), this represented a 12% growth in spending from 2018–19 – an additional $21.5 billion. This real growth was much higher than the average growth over the period from 2001–02 to 2019–20 (3.5% per annum) (Figure 1). The main driver of this high growth rate in 2019–20 was the economic measures the Australian Government implemented from March 2020 in response to the coronavirus 2019 (COVID-19) pandemic.
See COVID-19 economic response measures.
Before 2019–20, and before these COVID-19 measures, welfare spending in Australia had generally grown at a similar pace to population growth, with real spending fluctuating at around $6,985 per person since 2014–15. In 2019–20, real spending increased by around 11% to $7,668 per person.
This welfare spending relates to spending across the entire population and not spending per eligible person in particular programs or spending per benefit recipient. This more detailed analysis is not included on this page.