3 - What do governments do in Australia today?

Today the Commonwealth, State and Territory Governments spend over $500 billion per year in delivering services to Australians.

This appendix provides a snapshot of what governments do in Australia. It outlines the breadth of services provided, together with how governments go about providing them.

Table 3.1.1, at the end of this section, provides a comprehensive breakdown of Commonwealth and State spending (including tied payments) for the 2011-12 financial year.

Governments provide essential goods and services to improve Australians’ lives

Law and order

Australia has nine legal systems, one for each of the States and mainland Territories and the Commonwealth. In total, there are 1,000 judges, magistrates and coroners dealing each year with around 800,000 criminal cases and 500,000 civil cases (Productivity Commission, 2013a).

On the front line of law and order there are 60,000 sworn police officers in Australia. There are 21,000 fire and emergency service workers employed across the country and a further 26,000 volunteers in State and Territory emergency services. In total, Australian governments spend $25 billion each year on law and order (Productivity Commission, 2013a; Department of Employment, 2013a; Australian Council of State Emergency Services, 2012; Australian Bureau of Statistics, 2013a).

Defence and border security

The Commonwealth has a fundamental responsibility to protect and defend our people and protect and enhance our national security interests.

Australia’s Defence workforce includes more than 58,000 members of the armed services, together with over 20,000 reservists and over 20,000 civilians.

  • The Royal Australian Navy has 40 warships, including 6 submarines, 12 frigates, 14 patrol boats, plus coastal vessels and nine mine warfare ships.
  • The Australian Army provides a combined armed force of roughly division strength from its regular personnel, and another division from the reserve. It has 60 main battle tanks, a further 260 light armoured fighting vehicles, and 1,200 armoured personnel carriers, as well as attack helicopters and artillery.
  • The Royal Australian Air Force has just under 100 fighter aircraft, around 20 patrol aircraft, 35 transport aircraft and six airborne early warning and control aircraft.

These forces are deployed across 43 major military bases in Australia. The Commonwealth spends over $31 billion each year on defence including on capital equipment and for military superannuation (Department of Defence, 2013; Department of Defence, 2012; International Institute of Strategic Studies, 2012).

The Australian Customs and Border Protection Service is responsible for Australia’s 37,000 kilometres of coast plus eight major international airports and 60 ports.

Each week on average the service clears 600,000 passengers, inspects 29,000 air cargo consignments and conducts air surveillance over three million square nautical miles. Last year, 25,000 illegal maritime arrivals were intercepted, and 2,300 people were refused immigration clearance at airports and seaports (Australian Customs and Border Protection Service, 2013).

Education

Each school day, more than two million primary school students and one and a half million secondary school students attend the nation’s 6,700 public schools and 2,700 Catholic and independent schools. There are 290,000 teachers who work with 150,000 specialist and general staff to educate our children. Last year almost $40 billion was spent by all governments on running schools, an average of just under $11,000 per student (Australian Bureau of Statistics, 2012; Australian Bureau of Statistics, 2013a).

State and territory governments operate, subsidise and regulate 7,600 preschools and kindergartens, which provide early learning opportunities for around 300,000 children (Australian Bureau of Statistics, 2013c).

Some 900,000 Australian students and 300,000 international students attend Australia’s 39 universities. In addition nearly two million students are enrolled in vocational education and training courses. Governments provide around $15.5 billion to the higher education sector including upfront payments to educational institutions, concessional study loans, and living allowances for full-time students (Universities Australia, 2013; Australian Bureau of Statistics, 2013a).

Health

Australia has 753 public hospitals, and just under 600 private hospitals. In total, there are around 86,000 hospital beds (around four hospital beds for every thousand Australians). In a typical year, nine million Australian are admitted to our hospitals for an average stay of three to six days. Governments provide $35 billion each year to public hospitals and just under $4 billion to private hospitals (Australian Institute of Health and Welfare, 2013a).

There are 50,000 general practitioners and 20,000 specialists and over 250,000 nurses in Australia (Australian Bureau of Statistics, 2013b).

Our publicly funded Medicare system subsidises the primary health requirements of Australians, with the government providing more than 340 million rebates each year, around 15 rebates per person (Department of Health and Ageing, 2013).

The Commonwealth subsidises medicines through the Pharmaceutical Benefits Scheme. Just under 200 million subsidised prescriptions are filled by 24,000 trained pharmacists each year (Department of Health and Ageing, 2013; Department of Employment, 2013b).

In total, the States spend $38 billion each year on health services (50 per cent of which the Commonwealth contributes). In its own right the Commonwealth allocates some $60 billion to improve the health and wellbeing of Australians. At a total government spend of $100 billion this equates to an average of around $4,000 of health services per Australian (Australian Bureau of Statistics, 2013a).

Infrastructure

Australia’s governments provide much of the nation’s economically essential infrastructure. Australia has more than 900,000 kilometres of roads including 50,000 kilometres of highways. Governments spend some $18.5 billion maintaining and upgrading existing roads and building new ones (Bureau of Infrastructure, Transport and Regional Economics, 2013).

Around one in seven Australians travel to and from work and study by public transport provided by private and government owned businesses. In capital cities, public rail networks total 750 kilometres of track and 600 stations (Bureau of Infrastructure, Transport and Regional Economics, 2013).

Rail and port networks sustain a growing freight task. Each year, approximately 200 billion tonnes of domestic freight is transported by road, over 250 billion tonnes is carried on 33,000 kilometres of rail, and 100 billion tonnes is moved by sea. Each year, the nation’s 50 largest ports export 900 million tonnes and import around 140 million tonnes of freight (Bureau of Infrastructure, Transport and Regional Economics, 2013).

Public and privatised organisations provide Australia’s electricity. Secure and affordable energy is supplied via over 250 main electricity generators which generate over 50,000 megawatts of power across an energy transmission network over 900,000 kilometres in length (Australian Energy Regulator, 2013; Bureau of Infrastructure, Transport and Regional Economics, 2013).

State and local governments manage around 400 water treatment plants, and 600 sewerage treatment plants, and around 160,000 kilometres of water mains in urban areas. Australia has a 60,000 kilometre long network of rural water supply and drainage infrastructure (Bureau of Infrastructure, Transport and Regional Economics, 2013).

Governments sustain a social safety net for those most in need

Disability support

Australian governments provide around $6.9 billion to assist the 680,000 Australians with a significant disability who require daily care. The States have primary responsibility for delivering these services. Some 320,000 Australians currently use specialist disability services. Each year, the States assist 40,000 people with disability and their carers with accommodation support, 140,000 with community support, 60,000 with community access services, and 35,000 with respite services (Australian Institute of Health and Welfare, 2013c).

The Commonwealth provides the Disability Support Pension every fortnight to 820,000 people who are mostly unable to support themselves through employment, at an annual cost of $16 billion (Department of Families, Housing, Community Services and Indigenous Affairs, 2013).

The Commonwealth also assists with around 22,000 supported employment placements for people with disability, delivered by over 300 Australian Disability Enterprises outlets across the country (Department of Families, Housing, Community Services and Indigenous Affairs, 2013).

The Commonwealth Government also provides $3.6 billion worth of carer payments each year to over 200,000 Australians who provide constant care to someone who has a disability, a relevant medical condition or is otherwise aged and frail (Department of Families, Housing, Community Services and Indigenous Affairs, 2013).

Assistance for Australia’s veterans

As a nation we place a high priority on looking after Australians who serve or who have served in the defence forces. Each year some $7 billion of income support and services are provided to 340,000 veterans, with a further 85,000 surviving wives, husbands and dependents also receiving government assistance (Department of Veterans’ Affairs, 2013).

Unemployment benefits

Assistance for the unemployed is a key component of Australia’s social safety net. At present, the Newstart Allowance supports approximately 740,000 people without a job. The Commonwealth and States also provide programmes to assist people with some workforce capacity back into a job. The Commonwealth spends $7.5 billion on Newstart Allowance each year (Department of Education, Employment and Workplace Relations, 2013).

Assistance to Australia’s elderly

Some 2.4 million Australians receive the Aged Pension, costing government $40 billion a year. Nearly 500,000 older Australians also benefit from the Home and Community Care programme, which provides support such as nursing care, home modifications and meal delivery to help older people stay in their homes and maintain connections with family and community. Government also provides for 200,000 elderly Australians who receive permanent residential care in nursing homes and retirement communities (Department of Families, Housing, Community Services and Indigenous Affairs, 2013).

Family payments

The Commonwealth Government spends over $20 billion a year on assistance to 1.9 million families with children through the Family Tax Benefit scheme. In 2012-13, over 1 million children used approved child care, and 919,000 families received child care rebates, child care benefit or both in respect of this (Productivity Commission, 2013b; Department of Education, Employment and Workplace Relations 2013; Department of Families, Housing, Community Services and Indigenous Affairs, 2013).

Housing and homelessness

Governments also assist in the provision of housing to those in need. Approximately 20,000 homeless people are provided with emergency assistance each night through a combination of community, local, State and Commonwealth efforts. Governments also provide over 420,000 social housing dwellings for those on low incomes (Productivity Commission, 2013a).

Indigenous

The Commonwealth and States spend $25 billion each year on assisting Indigenous Australians, with $20 billion being spent through mainstream services and the remaining $5 billion through Indigenous specific services (Productivity Commission, 2012).

The largest portion of Indigenous-specific funding is for health services, as governments work to address the significant gaps in Indigenous infant mortality and life expectancy. Each year Indigenous Australians over 15 years of age receive 85,000 health assessments (Department of Health, 2013).

Other welfare services

States also provide care and protection services for children in need, with approximately 110,000 investigations a year. There are 270 intensive family support services, assisting 20,000 disadvantaged children (Australian Institute of Health and Welfare, 2013b).

Concession cards

Governments also recognise Australians who rely on the safety net may require additional concessions to make their day-to-day life easier. The Commonwealth provides 5.6 million Australians with various concession and health care cards such as the Pensioner Concession Card and Commonwealth Seniors Health Care Card (Department of Families, Housing, Community Services and Indigenous Affairs, 2013).

Governments provide many other services

Research

The Commonwealth is a major provider of research funding. It supports 2,500 grants allocated by the National Health and Medical Research Council and the Australian Research Council at a cost of around $1.6 billion (Australian Research Council, 2013; National Health and Medical Research Council, 2013).

The Commonwealth Scientific and Industrial Research Organisation (CSIRO) also undertakes research across a range of areas including land, water and atmospheric research, animal and plant sciences, mineral technologies, and astronomy.

CSIRO works with Australian industry, universities and other organisations around the world. CSIRO employs more than 6,500 people and receives Commonwealth funding of around $800 million per year, as well as funding from the private sector (CSIRO, 2013).

Foreign affairs

The Commonwealth is responsible for foreign affairs. Australia’s 4,000 diplomats contribute to better international relations at around 100 diplomatic missions around the world. Another 900 trade officials contribute to improving export and investment opportunities abroad for Australian businesses.

The Department of Foreign Affairs and Trade also issues around 1.7 million passports each year and provides consular assistance to Australians travelling overseas. Australia also maintains a substantial foreign aid programme, currently around $5 billion per year (Department of Foreign Affairs and Trade, 2013).

Immigration, agriculture and biosecurity

The Commonwealth Government determines and oversees an immigration programme of approximately 190,000 places per year as well as a humanitarian programme of around 14,000. $500 million is provided to assist with settlement services for migrants and refugees (Department of Immigration and Citizenship, 2013).

Each year, Australia’s immigration service grants 4.7 million temporary and 200,000 permanent visas, and confers citizenship on 137,000 new Australians (Department of Immigration and Citizenship, 2013).

Governments also provide support, advice and regulation to develop and protect Australia’s agricultural industries plus drought assistance and concessional loans for farmers.

Industry

Governments provide assistance to industry through various channels including tariff and anti-dumping protections, grant programmes, taxation concessions and government purchasing arrangements and guarantees.

Through these mechanisms, the Commonwealth provides around $5.1 billion of budgetary assistance to industry each year. The greatest level of assistance is provided to the services sector ($2.1 billion, mainly electricity, gas, water and waste services), then to manufacturing ($1.4 billion), followed by primary production ($0.9 billion) (Productivity Commission, 2013b).

Research and development

The Commonwealth provides around $9 billion in assistance for research and development each year, which includes its own research, as well as grants and tax incentives to the private sector (Australian Government, 2013a).

Australia has approximately 140,000 full-time-equivalent workers devoted to research and development, which includes 90,000 researchers, 25,000 technicians, and 20,000 support and other staff (Australian Bureau of Statistics, 2010a; Australian Bureau of Statistics, 2010b).

Arts, recreation and culture

Governments contribute $8.5 billion to recreational and cultural services each year. These include public broadcasting and cultural institutions, funding for the arts and the film industry, assistance to sport and recreation activities, as well as the management and protection of national parks and other world heritage areas (Australian Bureau of Statistics, 2013a).

The value of Australia’s heritage and cultural assets is $10.5 billion, just under $500 for every Australian. The Australian Broadcasting Corporation (ABC) and the Special Broadcasting Service Corporation (SBS) receive $1.5 billion to produce over 5,000 hours of television content on their eight free-to-air TV channels. They also run more than 20 radio stations (Australian Government, 2013b; ABC, 2013; SBS, 2013).

Australia has over 500 national parks, mainly maintained and managed by the States. The Commonwealth is responsible for managing six national parks, the Australian National Botanic Gardens, and the network of Commonwealth marine reserves. It is also responsible for Australia’s interests in the Antarctic (Department of the Environment, 2013).

 

Table 3.1.1: Commonwealth, States, and Commonwealth payments to the States expenditure, 2011-12

Function / Subfunction

C'wlth
($ billion)

Paid to the States
($ billion)

States
($ billion)

Total
($ billion)

Defence

21.3

0.0

0.0

21.3

Public Order & Safety

3.7

0.3

20.8

24.8

Education

13.3

15.4

35.5

64.2

    Primary & secondary

0.2

13.6

24.8

38.7

    University

8.7

0.0

0.3

9.0

    TAFE/VET

0.2

1.8

4.6

6.6

    Other tertiary

0.0

0.0

0.0

0.0

    Other 

4.2

0.0

5.7

9.9

Health

46.7

15.2

39.7

101.6

    Hospitals

1.1

13.6

25.5

40.2

    Other health institutions

0.0

0.0

0.8

0.8

    GPs and other community health

22.3

1.5

7.6

31.5

    Pharmaceutical

10.2

0.0

2.1

12.3

    Other 

13.1

0.1

3.7

16.8

Social security and Welfare

123.3

3.3

12.8

139.4

    Social security

105.6

0.0

0.8

106.4

    Welfare services

13.7

3.3

11.7

28.8

    Other

3.9

0.0

0.3

4.2

Housing and community amenities

5.3

2.7

8.0

16.0

    Housing

1.4

2.6

4.4

8.4

    Water Supply

0.0

0.0

1.3

1.3

    Sanitation

3.8

0.2

2.2

6.2

    Other community

0.1

0.0

0.2

0.2

Recreation & Culture

3.7

0.1

4.5

8.3

    Sporting & Recreation facilities

0.9

0.1

2.5

3.5

    Cultural facilities

1.2

0.0

1.8

3.0

    Broadcasting and film production

1.6

0.0

0.0

1.6

    Other

0.0

0.0

0.1

0.1

Fuel and Energy

6.5

0.0

1.2

7.7

Agriculture fisheries and forestry

2.3

0.7

1.9

4.8

Mining and minerals, manufacturing, construction

2.2

0.0

0.8

3.0

Transport & Communication

1.8

7.5

14.2

23.5

    Road transport

0.2

6.3

4.3

10.8

    Ports

0.3

0.0

0.2

0.5

    Rail

0.0

1.0

5.5

6.5

    Air transport

0.2

0.0

0.0

0.3

    Communication and other

1.1

0.2

4.2

5.4

Other economic activities

10.0

0.0

4.2

14.2

Other Purposes

21.2

4.3

9.1

34.6

General Public Service

20.1

0.2

6.6

26.9

General Revenue Assistance, inc. GST

0.0

47.1

0.0

47.1

Total

281.5

97.0

159.2

490.5

Source: Australian Bureau of Statistics, 2013a and National Commission of Audit.
Figures are presented as functional classifications and in expense terms, that is, spending for specified purposes, and may not completely align with other expense and payment figures used elsewhere in the Phase One Report and the Appendix.

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