Summary: Total expenditure on health goods and services in Australia was estimated at $147.4 billion in 2012-13 (9.67% of GDP). This was 1.5% higher than in 2011-12 (after adjusting for inflation), the lowest growth the AIHW has recorded since the mid 1980's. The average annual growth over the last decade was 5.1%.

Government funding of health expenditure fell in real terms for the first time in the past decade (by 0.9%). This was largely a result of a decline in the Australian Government's funding of 2.4%. This occurred in the context of average growth in Australian Government funding for the decade of 4.4%.

Growth in state and territory government funding of health expenditure was also relatively low. It grew by just 1.4% in 2012-13 in real terms, 4.2 percentage points lower than the average growth for the decade.

In contrast to government funding, growth in non-government funding was relatively strong. It grew by 7.2% in real terms in 2012-13 compared to the average of 5.4% for the decade.

The ratio of health expenditure to taxation revenue for the Australian Government fluctuated within a narrow range from 21.6% in 2002-03 to 21.5% in 2007-08, averaging 21.2% over that period. A drop in tax revenue following the GFC contributed to the ratio increasing to 25.3% in 2008-09 and 29.0% in 2009-10, before declining to 25.0% in 2012-13.

In 2012-13, the ratio of health expenditure to revenue for the state and local governments rose by 0.1 percentage points (from 27.5% in 2011-12 to 27.6%). This was the smallest increase over the decade.

The only jurisdictions to increase the proportion of their revenue spent on health in 2012-13 were New South Wales and Victoria, with New South Wales experiencing a marked growth (7.5%) and Victoria experiencing a more modest growth (2.0%). All other jurisdictions reduced this proportion, which was in contrast to the trend seen in the past decade.

In 2012-13, estimated per person expenditure on health averaged $6,430, which was $17 less (in real terms) per person than in the previous year. In 2012-13, expenditure essentially grew in proportion to (rather than faster than) population growth for the first time in the decade.

In 2012-13, governments funded $100.8 billion or 68.3% of total health expenditure in Australia. This was 1.6 percentage points lower than in 2011-12, the largest reduction of the decade. The Australian Government's contribution was $61.0 billion (41.4% of total funding) and state and territory governments contributed $39.8 billion (26.9%).

Non-government funding sources provided the remaining $46.6 billion (31.6%). The share contributed by non-government sources rose by 1.6 percentage points, with individuals contributing just over half of the increase (0.9 percentage points).

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