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Growth in Australia's spending on health remains slow, but health now represents a greater proportion of the economy than ever before, according to a new report from the Australian Institute of Health and Welfare (AIHW). 

The report, Health expenditure Australia 2014–15, shows that $161.6 billion was spent on health goods and services in 2014–15. While this was $4.4 billion (2.8%) higher in real terms than in the previous year, it is the third consecutive year that growth was below the 10-year average of 4.6%.  

Despite this, health spending reached 10% of Gross Domestic Product for the first time.

'This suggests that while growth in health spending is slow, it is faster than growth in other areas of the economy,' said AIHW spokesperson Dr Adrian Webster.

The report shows that total health spending by governments ($108.2 billion) was 1.3% higher than in the previous year—less than one-third of the average annual increase over the decade of 4.3%.

'The slow growth in government spending was mostly driven by a fall in state and territory government spending—the only time this occurred in the decade,' Dr Webster said.

State and territory governments contributed $42.0 billion in 2014–15 (or 26% of total spending). This represented a fall of 0.4% in real terms on the previous year.

'This is compared to average annual growth of 4.8% per year,' Dr Webster said.

The Australian Government contributed $66.2 billion (41% of total spending), up by 2.4% on 2013–14 (compared with average annual growth of 4.0%).

Non-government sources (individuals, private health insurance and other non-government sources) provided the remaining $53.4 billion (33.1%).

'Growth in non-government expenditure in 2014–15 was higher than for government, at 5.9%, and above the average annual growth over the decade of 5.4%,' Dr Webster said. Growth for individuals (out of pocket expenses) was 3.7% and it was 6.8% for private health insurance.

Canberra, 6 October 2016

Further information: Dr. Adrian Webster, AIHW, Tel. 02 6244 1119, mob. 0434 022 127

Full publication: Health expenditure Australia 2014–15