Continued slow growth

Health expenditure growth in 2013-14 was relatively slow according to most measures. Total expenditure on health was estimated at $154.6 billion in 2013-14, up by 3.1% on 2012-13 in real terms (after adjusting for inflation). This growth was higher than the 1.1% growth experienced in 2012-13 but 1.9 percentage points lower than the average annual growth over the past decade (5.0%).

Growth was also relatively slow in expenditure per person. An estimated $6,639 was spent per person on health in 2013-14, which was $94 more in real terms than in the previous year. This growth of 1.4% was less than half the average annual growth over the decade (3.3%).

Despite this relatively slow growth in health spending, the proportion of the economy that health represented increased from 9.7% of gross domestic product (GDP) in 2012-13 to 9.8% in 2013-14. This was a result of relatively low growth in GDP.

When compared to taxation revenue, government health spending represented the same proportion of taxation revenue (24.7%) as the previous year.

Government expenditure

In 2013-14, governments provided $104.8 billion, or 67.8% of total health expenditure in Australia. There was an increase in the ratio of health expenditure to taxation revenue for the Australian Government (from 25.0% to 25.2%) and a decline for the states and territories (24.3% to 24.0%).

The Australian Government's share of total health expenditure declined over the second half of the decade, from 43.8% in 2008-09 to 41.2% in 2013-14. The state and territory and local government share of expenditure has stayed at around 26.6% (the value in 2013-14) since 2009-10.

Non-government expenditure

The non-government sector share of total expenditure ($49.8 billion in 2013-14) has risen over the past 2 years, from 30.0% in 2011-12 to 32.2% in 2013-14, despite generally declining throughout the decade.

The proportion of total health funding from private health insurance funds declined steadily from 8.1% in 2003-04 to 7.4% in 2011-12. It has since risen to reach 8.3% in 2013-14. This coincided with changes to the income testing arrangements surrounding the Australian Government's private health insurance premium rebates, which had the impact of reducing the Australian Government's contribution and increasing the share that private health insurers fund through premiums charged to members.

Over the decade, funding by individuals was the fastest growing area of non-government expenditure. Expenditure by individuals grew by an average of 6.2% a year in real terms compared with 5.3% for all non-government sources. It also grew faster than total health spending (5.0%).