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Real final consumption expenditure(a) per capita
Final consumption expenditure (FCE) is the acquisition of goods and services used for the direct satisfaction of individual or collective wants. Among the different forms of consumption, FCE is most directly relevant to an assessment of Australia's progress, and is the focus of this commentary. It is distinguished from 'intermediate consumption' (the using up of goods and services in the production of other goods and services) and 'consumption of fixed capital' (depreciation).
TRENDS IN CONSUMPTION
Consumption grew throughout the 1990s. Between 1990-91 and 2000-01, real FCE per capita rose by almost 2.2% a year.
Both households and governments incur final consumption expenditure. There were some fluctuations in the relative contributions of the two sectors during the past decade, but in both 1990-91 and 2000-01, households accounted for about three-quarters of the total and government for about one-quarter.
Real per capita household consumption expenditure grew by 2.3% a year between 1990-91 and 2000-01.
Household expenditure on communication showed particularly strong growth (an increase of over 10% a year in real per capita terms). This partly reflected increased availability and use of both mobile phones and the Internet. Australians have often been quick to take up new consumer technologies. For more detail, see the commentary Communication and transport.
Household expenditure on recreation and culture also grew strongly (up by more than 4.6% a year).
The share of household expenditure on items that could be considered essential for daily existence (namely, food, clothing, housing and utilities) fell during the past decade (down from 37.5% in 1990-91 to 35% in 2000-01).
Real government consumption expenditure per capita grew by 1.8% a year between 1990-91 and 2000-01. Education and health were among the largest expenditures throughout the decade.
Source: Australian System of National Accounts.(SEE FOOTNOTE 1)
FACTORS INFLUENCING CHANGE
A major factor underlying the increases in total final consumption during the 1990s was the growth in real income.
The composition of household consumption expenditure has changed appreciably throughout the decade - in part reflecting new technologies and the growth in expenditure on some services. Changes in government consumption have in part reflected policy emphases and some changes in the mix of public and private provision of services.
LINKS TO OTHER DIMENSIONS OF PROGRESS
If a nation experiences income growth, there may be an increase in consumption or saving or both.
See also the commentaries National income, and Saving.
1 All data in this commentary are derived from Australian Bureau of Statistics 2001, Australian System of National Accounts 2000-01, Cat. no. 5204.0, ABS, Canberra.