Government spending across local, state, and federal governments accounted for a record 28 per cent of gross domestic product (GDP)—economic activity—at the end of the 2024 financial year, up from 21 per cent ten years prior, in the June quarter of 2014.
As well as taking up a larger share of the total economy, increases in government spending have in recent years been the single biggest contributor to economic growth. Specifically:
- Between June 2022 and 2024, growth in total government spending (state, federal, local) accounted for 55 per cent of total GDP growth. This was higher than during any other government on record, and up from approximately 20 per cent under the Fraser, Hawke-Keating, Howard, and Rudd-Gillard governments.
- Growth in federal government spending alone accounted for approximately 32 per cent of GDP growth between the start of the Albanese government and the June quarter of 2024. This had increased from 22 per cent in 2013-2020 under the most recent Coalition government, 13 per cent in 2007-2013 under the Rudd-Gillard Labor government, and 7 per cent in 1996-2007 under the Howard Coalition government (it was 34 per cent during the Covid-affected years of 2020-2022).
- Growth in state and local government spending also accounted for a larger share of total economic growth, at 23 per cent, up from 18 per cent in 2013-2020, 9 per cent in 2007-2013, and 14 per cent in 1996-2007.
- Federal government spending under the current government has been averaging just over $70 billion per quarter, which is approximately 50 per cent higher than the quarterly average from 2013 to 2020.
