Coronavirus disease 2019 (COVID–19) that emerged in 2019 quickly became a worldwide crisis due its severity and lack of immediate population immunity, and by March 2020, the World Health Organization declared it a pandemic. Australia faced significant disruptions due to the COVID–19 pandemic since early 2020 through to the first half of 2022, experiencing waves of infections that strained the health care system and its resources and led to loss of life. By December 2021, there were five detected variants in Australia with a wide spectrum of severity.

Although the initial burden of disease from COVID–19 in Australia was modest, ranking 135th in leading cause of burden (with only 8,400 disability-adjusted life years (DALYs) lost) in 2020, by 2022, COVID–19 became the 5th leading cause of fatal burden (contributing to 4.1% of total burden) and 21st leading cause of non–fatal burden (contributing 1.4% of total burden) See Australian Burden of Disease Study 2022.

COVID–19 has also placed a substantial load on Australia’s health system, which has resulted in increased health spending particularly in public health and public hospitals.

The purpose of this report is to understand how government health spending in response to COVID-19 and spending by individuals on COVID-19 related items, was distributed during the three financial years Australia has been most impacted by the pandemic, 2019–20, 2020–21 and 2021–22.

Government spending is sourced from the National Partnership on COVID–19 Response (NPCR) and the Australian Government Department of Health and Aged Care. For completeness this report also includes Australian Government aged care spending that was for health purposes. Spending by individuals is sourced from pharmacy sales data and from out-of-pocket payments for COVID–19 related Medicare Benefits Schedule (MBS) and Pharmaceutical Benefits Scheme (PBS) items. The report also explores Australia’s standing amongst OECD countries in terms of additional health spending and excess mortality during the pandemic.

This report has a broader scope than the Health system spending on disease and injury in Australia 2020-21 report, which is limited to spending directly attributable to the treatment of COVID-19 in hospitals, and through MBS and PBS. This report, by contrast, estimates total government spending in response to the pandemic, including public health spending on the vaccine rollout and COVID-19 testing for example.  This report also includes estimates of spending by individuals on COVID-19 related items.

A timeline of the key events during the Australian experience of the pandemic is provided in the Appendix.