At a glance

  • $220.893 billion was spent on health in Australia in 2020–21, with one-fifth spent in Queensland.
  • Over the past decade, growth in health spending has exceeded GDP growth, although both are slowing.
  • Government (federal and state) is the biggest contributor to health spending.
  • Spending on hospitals was the largest component of health expenditure and is increasing.
  • The largest component of individual health spending was for non-benefit medications.
  • Australia ranked favourably among OECD countries for health spending relative to GDP and per capita spending on health and was consistently better than the OECD average.
  • The COVID-19 pandemic impacted health spending in many ways, often through increasing the cost and complexity of service delivery. Direct support through Australian Government support and programs was an estimated to be $20 billion over the period 2019–20 to 2020–21.

Total spending on health

In 2020–21, $45.461 billion was spent on health in Queensland. This was one-fifth (20.6%) of national spending ($220.893 billion), consistent with Queensland’s population share (20.3%).1

Total spending on health in Queensland increased in real terms by 3.4% per year over the past decade, as it did nationally. The growth in recurrent spending in Queensland, however, was higher than national (3.6% per year compared with 3.4%) and there was a decline in capital spending in Queensland between 2010–11 (on average, 0.2% per year, compared with a 3.2% increase nationally).1

Nationally, health spending accounted for 10.7% of Gross Domestic Product (GDP) in 2020–21, having increased from 9.2% a decade earlier. Over this period, the annual increase in health spending outstripped growth in GDP at 3.4% per year since 2010–11, compared to 2.3%.1

Queensland government

In the 2020–21 state budget, health was the largest component of Queensland Government budgeted expenditure (31.1%) followed by education (24.0%).2 This is similar to the 2022–23 budget (30.0% and 24.3% for health and educations, respectively).3 About one-third of tax revenue in Queensland was spent on health (33.8%) in 2020–21.1

Relative cost per person

Health spending per person in Queensland exceeded national spending in 2020–21, $8,757 compared with $8,617 per person nationally. Over the past decade, per person spending in Queensland increased by 1.8% per year, slightly less than the national increase of 1.9%.1

On average, Australians spent 1.9% of their income on health in 2020–21, estimated to be 0.2% of their net worth. Individuals’ health spending relative to their wage growth has increased slightly in the past decade (2.2% increase in health spending compared to 2.5% in income growth and 6.0% increase in net worth).1

Funding source

Governments funded 70.6% of total health expenditure in 2020–21 with non-government sources funding the remainder. In 2020–21, total health expenditure was from:

  • Australian Government: 42.7%
  • state and territory governments: 27.9%
  • individuals: 15.0%
  • health insurers: 8.2%
  • other non-government: 6.2% (Figure 1).1
Figure 1: Sources of funds, total health expenditure ($ billion), Australia 2020–21
Pie chart displaying the source of funds for total expenditure in Australia in 2020--21, in $billion. ...

Over the past decade, total health expenditure in Australia increased at the rate of 3.4% per year on average, made up of:

  • 3.2% per year increase by the Australian Government
  • 3.7% by state and territory governments
  • 3.2% by non-government sources.1

On average, total health spending by individuals in Australia in 2020–21 was made up of:

  • non-benefit medications (34.4%)
  • dental health (19.6%)
  • medical services (14.1%)
  • hospitals (11.6%)
  • other health practitioners (4.5%)
  • benefit paid-pharmaceuticals (4.5%).1

During 2020–21, recurrent spending increased on most areas of health, with the greatest increase for hospitals, a $4.2 billion (4.9%) increase in real term. This growth in hospital spending may have been related to the increase in hospitalisations from the easing of restrictions from COVID-19.1

Recurrent spending on primary health care, increased in real terms by $6732.9 million from 2019–20 to 2020–21. This growth was mainly due to increased spending by the Australian Government of $3.920 billion. Spending by state and territory governments and non-government entities on primary health care increased by 13.6% and 5.1%, respectively, compared to 2019–20, most likely due to the impacts of the COVID-19 pandemic.1

In real terms, spending on research increased by $79.3 million (1.2%) between 2019–20 and 2020–21. This was lower than the average annual real growth rate of 3.0% over the past decade.1

Spending by area

The majority of total health expenditure in 2020–21 was recurrent spending (94.7%) and the remaining 5.3% was capital. Over the past decade this varied very little from year to year despite periodic significant capital investments in different regions.1

The greatest proportion of spending was for hospitals (40.6%), followed by primary health care/GP services (33.2%) (Table 1). Other areas of spending included referred medical services (10.9%), research (3.1%) and other services (6.9%) including community health, public health, oral health, and medical aids.1

In 2020–21, public health spending was 3.6% of total expenditure, and this included communicable disease control, organised immunisation, food standards and hygiene, cancer screening, prevention of hazardous and harmful drug use and preventive health.1

Public health involves activities and services funded or delivered by state and territory health departments that protect and promote the health of the whole population or specified population subgroups. Spending on public health has been consistently one of the smallest of all the areas of spending in Australia.1

Table 1. Australian health expenditure by area of spending and funding source, 2020–21 Ordered by total national expenditure $ million
Area of spending Total national expenditure Australian Government State and Territory governments Other non‑government
$ million % of total $ million % by area $ million % by area $ million % by area
Primary health care 73,398 33.2 33,484 45.6 12,316 16.8 27,597 37.6
Public hospital 70,526 31.9 28,052 39.8 37,295 52.9 5,179 7.3
Referred medical services 24,019 10.9 18,294 76.2 – – 5,725 23.8
Private hospital 19,128 8.7 5,023 26.3 1,069 5.6 13,035 68.1
Other services 15,233 6.9 3,915 25.7 4,331 28.4 6,987 45.9
Capital 11,733 5.3 125 1.1 5,680 48.4 5,928 50.5
Research 6,858 3.1 5,493 80.1 911 13.3 454 6.6
Total 220,893 100.0 94,386 42.7 61,601 27.9 64,906 29.4

International comparisons

In 2019, Australia’s spending on health as a proportion of GDP ranked 11th among the 36 OECD member countries, and has ranked between 17th and 7th in the previous two decades.4

Note: This dashboard is developed and maintained by the Australian Institute of Health and Welfare. Source figure number does not align with numbering on the current page.

COVID-19 health response spending

Over the period 2019–20 to 2020–21, there was an estimated $20.0 billion spent through this and other commonwealth COVID-19 response programs ($12.1 billion on the National Partnership on COVID-19 response (NPCR) and $7.9 billion on the Department of Health programs in current prices.4

In March 2020, the Australian Government entered a National Partnership Agreement with state and territory governments—the NPCR.5 This agreement aimed to provide financial assistance for the additional costs incurred by state and territory health services in responding to the COVID-19 outbreaks, and efforts to minimise the spread of COVID-19 in the Australian community.

In addition, governments implemented a range of policies and programs in response to the COVID-19 pandemic, including specialised testing facilities, Medicare-subsidised telehealth services, general practitioner (GP)-led respiratory clinics, distribution of large volumes of personal protective equipment (PPE) to health systems and increased mental health counselling.

As part of the NPCR, state and territory governments also funded $1.3 billion on hospital services payments and $2.3 billion on state public health payments.4

Total Australian Government spending through specific COVID-19 Department of Health programs (outside the NPCR) up to 2020–21 was estimated to be $7.9 billion in current prices ($1.7 billion in 2019–20 and $6.2 billion in 2020–21).4

Additional information

More expenditure information is available from:

References

  1. Australian Institute of Health and Welfare. 2022. Health expenditure Australia 2020-21. Canberra: Australian Government.
  2. Queensland Treasury. 2020. Queensland Budget 2020-21: budget strategy and outlook. Brisbane: Queensland Government.
  3. Queensland Treasury. 2022. Queensland Budget 2022-23: budget strategy and outlook. Brisbane: Queensland Government.
  4. Australian Institute of Health and Welfare. 2022. Health expenditure. Accessed: 10 January 2023.
  5. Biggs A. & Grove A. 2020. Public health response to COVID-19. Accessed: 14 February 2023.

Last updated: July 2024