Australian welfare expenditure grows 15% in 2003-04

Posted September 14th 2006

by DPS

Welfare spending by governments, non-government community service organisations and households rose by $10 billion, or 15% , to nearly $80 billion in 2003-04, according to the Australian Institute of Health and Welfare’s report Welfare Expenditure Australia 2003-04.

Welfare expenditure on older people accounted for the largest share of the $80 billion total ($28 billion), followed by families and children ($27 billion) and people with disabilities ($14 billion). The remaining $11 billion was spent on a range of other groups.

Of the $80 billion welfare expenditure, $20 billion was spent on welfare services – an increase of $2.4 billion, and an 8.3% increase over the previous year. The growth was mostly due to a 38% increase in funding from non-government community services organisations.

Welfare services for older people was the area of most rapid growth in funding by the Australian Government, averaging 11% per year from 1998-99 to 2003-04.

On a per person basis, expenditure on welfare services (in current price terms) in 2003-04 was $1,006, up from $655 in 1998-99.

Almost half of the expenditure incurred by non-government community service organisations was funded by governments with a further 25% funded by clients’ fees for services, and 26% from the non-government community service organisations’ own funding sources.

The greatest percentage of household contributions (83%) was in the form of client fees for services provided by non-government community service organisations. An additional 10% was spent on services provided by governments, and the remaining 7% for informal child care.

In 2003-04, total welfare concessions to households (including Australian Government tax expenditures) were estimated at $22.2 billion. Most of this (92.8%) was in the form of Australian Government social tax expenditures or tax exemptions for individuals. About three-quarters of this amount went to older people with the remainder going to families and others, such as low income earners.