Insights into Government Finance Statistics, June 2026

Net operating balance (NOB) is

• a summary measure that reflects the ongoing sustainability of government operations 
• derived by transactions in revenue less transactions in expenses
• equal to the change in net worth due to transactions.

Australia’s net operating balance was -$37.8 billion in 2025-26, $17.9 billion lower than the previous year.  

• Revenue was $1,073.4 billion, increasing 6.6% ($66.5 billion).  
• Expenses were $1,111.2 billion, increasing 8.2% ($84.4 billion). 

Australia’s revenue increased by 6.6% ($66.5 billion) in 2025-26, this was higher than the 4.0% ($38.5 billion) increase in 2024-25.  

Taxation revenue increased by 7.0% ($58.6 billion) and accounted for 83.1% of the total Australian revenue. This was higher than the 4.3% ($34.2 billion) in 2024-25. 

Commonwealth taxation is the largest component of Australia’s total taxation revenue at 80.3% and increased 6.7% ($44.8 billion) in 2025-26 compared to 2024-25. Estimated annual growth was driven by increases in personal income tax, company income tax, and goods and services tax (GST), offset by a decrease in customs duties on imports. 

• Personal income tax increased 9.0% ($28.5 billion) compared to an increase of 1.3% ($4.1 billion) in 2024-25.    
• Company income tax increased 5.6% ($8.1 billion) following a decrease of 0.9% ($1.3 billion) in 2024-25. This is consistent with ABS Business Indicators data which shows company gross operating profits recovering in 2025-26 (a).  
• Goods and Services Tax increased by 5.8% ($5.4 billion) following the 4.5% increase ($4.0 billion) in 2024-25, consistent with growth in CPI (b) and ABS household spending data (c). 

State and local taxation accounted for 19.7% of total taxation revenue and increased 8.5% (up $13.8 billion) in 2025-26. The increase was driven by stamp duties on conveyances, payroll taxes, land taxes and municipal taxes. 

• Stamp duties on conveyances increased 18.3% ($6.4 billion) in 2025-26 which was in-line with the rise in Australia’s mean dwelling price (d). 
• Payroll tax revenue increased by 6.3% ($2.5 billion) in 2025-26, noting this is relatively weaker than the average estimated annual growth of around 12.5% over the five years to 2025-26.    

     a.    Source: Business Indicators, Australia, June 2026 | Australian Bureau of Statistics 

2. Source: Consumer Price Index, Australia, June 2026 | Australian Bureau of Statistics  
3. Source: Monthly Household Spending Indicator, June 2026 | Australian Bureau of Statistics  

     d.    Source: Total Value of Dwellings, March Quarter 2026 | Australian Bureau of Statistics

Australia’s royalty income decreased by 4.2% ($0.9 billion) in 2025-26 and accounted for 2.1% of total Australian revenue. This was largely driven by Queensland. 

Royalties in Queensland, which are earned predominantly through coal mining, decreased 16.1% ($1.3 billion) in 2025-26. Royalties in Queensland peaked in 2022-23 following the introduction of Queensland’s tiered royalty system (a). During 2022-23, coal prices regularly exceeded $300 per tonne, attracting a royalty rate of up to 40%. By contrast, in 2025-26, prices remained below $175 per tonne, attracting lower royalty rates.  

By comparison, Royalties in Western Australia, which are earned predominantly through iron ore, increased 6.3% ($0.6 billion) in 2025-26. 

     a.    Source: Mineral royalty rates - Queensland Revenue Office

Australia’s expenses increased by 8.2% ($84.4 billion) in 2025-26. Drivers were:  

• Capital transfers rose 167.9% ($19.7 billion) 
• Employee expenses rose 6.1% ($17.1 billion) 
• Use of goods and services rose 6.3% ($12.0 billion) 
• Social benefits in goods and services rose 5.3% ($10.0 billion) 
• Current monetary transfers to households rose 5.4% ($9.1 billion) 
• Interest expense rose 12.0% ($7.8 billion). 

Strong growth in capital transfers, which accounted for 2.8% of total expenses, contributed 23.3% to the overall growth in expenses in 2025‑26. Student debt forgiveness (a) accounts for just over half of the increase, with increases in Cheaper Home Batteries Program (b) and AUKUS industrial base payments (c) also contributing to growth. This was partially offset by slowing growth in employee expenses and social benefits following the end of Commonwealth and State energy bill relief. 

1. Source: Study and training loans – what's new | Australian Taxation Office
2. Source: Cheaper Home Batteries Program - DCCEEW
3. Source: AUKUS Agreement | Australian Submarine Agency

Australian employee expenses (a) increased 6.1% ($17.1 billion) in 2025-26 and were 26.6% of total expenses. State and local government employee expenses increased 6.3% ($12.5 billion) and was the largest contributor to growth, with state government employees making up the largest portion of public sector workers (b). Commonwealth employee expenses increased by 5.2% ($2.9 billion) and universities increased by 7.2% ($1.6 billion). 

1. Employee expenses is comprised of superannuation, wages and salaries, workers’ compensation and other employee expenses
2. Source: Public sector employment and earnings, 2024-25 financial year | Australian Bureau of Statistics

The estimated annual growth in Australian employee expenses was driven by wages and salaries and includes the impact of pay rises, bonuses and backpay. Wages and salaries grew 6.6% in 2025-26 which was lower than the growth of 7.3% in 2024-25. This is consistent with the Wage Price Index (WPI) (a), where public sector wage growth eased to 3.3% through the year to June 2026.  

1. Source: Wage Price Index, Australia, June 2026 | Australian Bureau of Statistics

Australia’s social benefits increased 5.3% ($10.0 billion) in 2025-26 and were 17.8% of total expenses. Commonwealth government payments are around 92% of total social benefits. 

Commonwealth social benefits increased 8.0% ($13.5 billion) in 2025-26, driven by increases in disability, health, aged care, childcare and family, and other benefits, noting that growth in social benefits has moderated over the past five years.  

• Disability benefits increased 10.7% ($4.9 billion) in 2025-26 consistent with the 10.8% growth observed in 2024-25. In 2025-26, growth in participant numbers increased at a slower rate than the previous year, at the same time average payment per participant rose. The moderation of growth compared to trend is consistent with NDIS reforms to address the financial sustainability of the scheme (a), introduced in the 2024-25 Budget. 
• Health benefits rose 8.5% ($4.6 billion). This was driven by the expanded bulk billing incentive (which was previously limited to children under 16 and Commonwealth concession card holders) to all Medicare-eligible patients from 1 November 2025 (b). This contributed to the increase in bulk billing rates and the Medical Benefit Schedule payments, over the same period (c). 
• Aged care benefits increased 7.3% ($2.4 billion) in 2025-26 following the implementation of the Aged Care Act 2024 and Support at Home program, commencing 1 November 2025, which provided a new rights-based funding and regulatory structure for aged care services. Other contributors to growth include AN-ACC funding changes (d) alongside the Fair Work Commission Stage 3 award wage increase from 1 October 2025 (e). Growth in Aged care has moderated, compared to the 5-year average growth of 20.5%, as recommendations from the Royal Commission into Aged Care are implemented. 

1. Source: Budget 2024–25: Getting the NDIS back on track | Australian Government Department of Health, Disability and Ageing
2. Source: Bulk billing rates About bulk billing incentives in general practice | Australian Government Department of Health, Disability and Ageing 
3. Source: MBS Statistics Medicare quarterly statistics – Bulk Billing by Primary Health Network (June quarter 2025-26) | Australian Government Department of Health, Disability and Ageing 
4. Source: About funding for residential aged care | Australian Government Department of Health, Disability and Ageing 
5. Source: Better and fairer wages for aged care workers | Australian Government Department of Health, Disability and Ageing 

State social benefits decreased 18.1% (down $3.5 billion) in 2025-26 reflecting the end of the jointly funded Commonwealth Energy Bill Relief in December 2025, while Queensland and Western Australia’s large one-off state schemes were discontinued. States continue to provide pre-existing energy bill relief for concession-card holders.  

• Commonwealth Energy Bill Relief Fund extension 
• WA Household and Small Business Electricity Credit 
• QLD Cost of Living Rebate for Households 

Australia’s monetary transfers to households increased by 5.4% ($9.1 billion) in 2025-26 and were 15.9% of total expenses. Growth in aged pension, disability and carers pensions, family benefits, and job seeker payments were broadly consistent with indexation cycle increases.