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Last week, the Australian Bureau of Statistics (ABS) released two sets of data illustrating the extent to which Australia’s economy and labour market have been driven by government spending since the pandemic.
The March quarter national accounts, presented below by CBA, showed that government spending as a share of the economy was 28.8% in the March quarter, up from below 24% a decade prior, with most of this growth arriving since 2020:
The next chart from CBA shows that all forms of state and federal spending have grown faster than the broader economy, with state investment and federal consumption rising the most:
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.