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 1980s. 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).