At $90 billion in 2005-06, welfare expenditure is of a similar scale to health expenditure ($87 billion).
Over the last eight years (since 1998-99) welfare expenditure has continued to rise each year. Although annual increases have fluctuated from year to year, on average they exceeded the inflation rate.
Governments continue to be the major funders of welfare cash benefits and services, while non- government community service organisations (NGCSOs) are major providers of welfare services.
Welfare expenditure comprises cash payments and services specifically directed to older people, families and children, people with disabilities and other groups (such as widows and migrants).
The $90 billion amount excludes unemployment benefit payments and services which (in terms of government purposes) are classified as 'labour and employment affairs' rather than 'welfare'.
Payments and related services that are categorised as welfare expenditure include (among many others) the Family Tax Benefit, Maternity Allowance, the Age Pension, the Disability Support Pension, Support for Carers, and the War Widows Pension.
Older people and families and children account for around one-third each of total welfare expenditure, followed by people with disabilities (at roughly one-sixth), then other groups.
Welfare expenditure payments and services
- Between 1998-99 and 2005-06, welfare expenditure rose from $57 billion to $90 billion (Table 2.1).
- Approximately $81 billion of total welfare expenditure can be allocated to one of the four target groups. Expenditure on older people was the highest at $34 billion, while families and children received $27 billion, people with disabilities $17 billion, and other recipients about $3 billion (Table 2.1).
- Of the $90 billion expenditure in 2005-06, cash benefits accounted for $61 billion (68%) and welfare services (benefits-in-kind) the remaining $29 billion (32%) (Table 2.1).
- The Australian Government funded all cash benefits in 2005-06 ($61 billion).
- Governments (Australian, state and territory, and local) funded 71% ($20 billion out of $29 billion) of total welfare services expenditure, with the non-government sector funding the remaining 29% (about $8 billion) (Table 3.5).
- NGCSOs provided most welfare services ($20 billion worth out of $29 billion) in 2005-06 (Table 3.3).
- Between 1998-99 and 2005-06, the Australian Government funded, on average, 40% of total welfare services expenditure; state and territory governments funded 29%; and local governments funded about 2%. Funding by households (through payment of client fees) accounted, on average, for 19% of total welfare services expenditure, and the remaining 10% was funded by NGCSOs (Table 3.5).
Government funding of welfare services by welfare services category
- In 2005-06, the highest recurrent funding for welfare services by the Australian Government was for older people (64%). About one-quarter (21%) went to families and children. Welfare services for people with disabilities accounted for 13% of welfare funding, and the remaining 2% funded 'other welfare' (Table 3.7).
- Over the period 1998-99 to 2005-06, average growth for families and children was 5.8% per year. Welfare services for people with disabilities grew by 4.2% per year, and welfare services for older people 2.6% per year (Table 3.8).
State and territory governments
- In 2005-06, the highest recurrent funding for welfare services by state and territory governments was for people with disabilities (39%). Welfare services expenditure for families and children accounted for 26%, for older people 25%, and 'other welfare' 10%.
- Over the period 1998-99 to 2005-06, the most rapid growth of welfare services funding by state and territory governments was for families and children, averaging 6.7% per year after allowing for inflation. Welfare services for people with disabilities increased on average by 3.9% per year, and welfare services for older people by 1.1% per year. Average growth in 'other welfare' declined 1.0% per year (Table 3.8).
- State and territory government funding of welfare services averaged $421 per person in 2005-06, ranging from $358 in Queensland to $604 in the Northern Territory (Table 3.10).
Funding of non-government welfare services expenditure
- In 2005-06, almost two-thirds (62%) of NGCSO expenditure on welfare services was funded by governments; one-quarter was funded by households in the form of client fees (25%), and 13% came from NGCSO own funding (Table 3.11).
- In 2005-06, 86% of client fees paid by households was for services provided by NGCSOs, 10% was for services provided by governments, and the remaining 4% was for informal child care provided by the household sector itself (Table 3.13).