The GDP partials released on Tuesday by the Australian Bureau of Statistics (ABS) showed that public sector spending is driving Australia’s economy.
Total public demand is expected to contribute 0.4 ppt to the quarterly change in GDP, easily the largest contributor to the expected 0.3% quarterly growth:
The lion’s share of public sector activity stems from public consumption, namely outlays to fund social benefits (i.e. aged care, the NDIS, childcare, health care, and cost-of-living rebates), higher public sector wages, and growing government transfer payments (i.e. aged pension, disability & carers pension, family tax benefits, and job seeker payments).
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