The Australian economy recovered in 2021-22, as business and employment conditions improved following two years heavily impacted by the COVID-19 pandemic. In 2021-22 Gross Domestic Product (GDP) rose 3.7%, the largest rise in annual GDP since 2011-12 (a).
Improved economic activity contributed to strong growth in total taxation revenue of 15.2% in 2021-22. Commonwealth company income tax and personal income tax significantly increased compared to the previous financial year. The strong residential property market drove significant increases in state and territory stamp duties on conveyances revenue for the second year in a row.
The end of the 2020-21 financial year saw the cessation of the government subsidies such as JobKeeper and Boosting Cash Flow for Employers. Governments shifted the focus of their support to households and businesses affected by the third wave lockdowns.
State and territory governments provided subsidies direct to businesses through the Commonwealth-State Joint Business Support Programs. Across state and territories, the size of support packages were largest in New South Wales, Victoria, and ACT, and targeted towards industries and regions impacted by lockdowns. To contrast, the bulk of Commonwealth government support were for households, through COVID-19 Disaster Payments.
Total general government health expense rose 12.1% in 2021-22, the highest annual growth rate over the past decade. During 2021-22, governments purchased and administered large quantities of COVID-19 vaccines and rapid antigen tests. Other healthcare spending continued to increase in the salaries and wages of frontline staff, COVID-19 testing, and personal protective equipment. Spending was particularly strong in Victoria and New South Wales.
Severe flooding and natural disasters impacted large regions of Australia (b). Commonwealth and state government disaster recovery payments to businesses and households rose compared to 2020‑21.
- using the GDP annual chain volume measures as published in Table 36 in the December quarter 2022 issue in Australian National Accounts: National Income, Expenditure and Product
- Australian disasters, Disaster Assist, Department of Home Affairs, July 2022