Australian Government spending balloons to highest share of economy ever

Australian Government spending balloons to highest share of economy ever. By Patrick Commins.

Government spending has ballooned to its highest share of the economy in history, with experts warning more public expenditure is on the way as Labor prepares its first budget, including promises on child care and wages.

Taxpayers are bearing an increasingly heavy burden to fund higher expenditure at all levels of government, a load that has been made heavier by major new commitments over the past 2½ years to fund services such as the NDIS, aged care, health care, child care and defence. …

After fluctuating around 23 per cent of GDP over a number of decades, total government spending — including the states and territories — now sits at around 28 per cent of real national output. …

The 2021-22 budget, delivered in May 2021, announced a major increase in ongoing federal expenditure, including a major increase in aged-care funding, costed at $18bn over the forward estimates, alongside an additional $13bn for the National Disability Insurance Scheme, and a further $2.3bn for mental health. …

The Albanese government has ambitious goals to increase spending on key social services, including an “aspiration” towards universal childcare provision. The government’s support to pay aged-care workers as much as 25 per cent more will see the commonwealth spending an extra $5bn a year.

Australia’s government spending as a share of GDP took a big leap up under Whitlam too, but never retreated.

Now it looks like another sea change is occurring. This can only mean more socialism, more capital allocation by politicians and less by the market, more corruption, and less efficiency.

Year on year growth of cash money in Australia runs well above our understated CPI:

How much of our GDP growth is just due to money printing, uncorrected by the understated CPI? Probably a significant amount.

hat-tip Stephen Neil