Figure 1 – Recent PBS data shows growth remains low and is trending down
Growth in government expenditure on the PBS in the year ended 30 June 2011 was 5.2%. After adjusting for inflation, this represents growth of less than 2% in real terms. This is a sustainable level of growth, and existing arrangements such as price disclosure will ensure expenditure remains well under control. The graph below does not include the impact of further price reductions that took effect from 1 August 2011.
Figure 2 – PBS growth is declining decade on decade
The ten year average growth in PBS in the last decade (2000-2010) was one of the lowest since the 1980’s. The publically available data for PBS expenditure shows that in the year to 30 June 2011, PBS grew by 5.2%. The current growth rate reaffirms that the long term downward trend is continuing.
Figure 3 – PBS as a % of GDP remains stable
Over the last decade, PBS expenditure as a proportion of GDP has remained steady at between 0.6% and 0.65%.
Figure 4: PBS as a proportion of Australian GDP- Actual vs. Projected
Australia’s 2010 Intergenerational Report shows that expenditure on the PBS will remain steady at 0.7% of GDP through to 2020. Already, the actual expenditure in 2009-10 was below the 0.7% of GDP forecasted in IGR for 2010.
