The Australian social security system differs from those in most of Europe and the United States in a
number of ways, including:
• the benefits are generally more targeted through means-testing rather than based on factors such
as past earnings
• the system is largely funded by general government revenue rather than through contributions by
employers or insured employees
• benefits are not time-limited.
Whiteford (2014) argues that these differences contribute to making the Australian system relatively
efficient in terms of the distribution of benefits to the most needy, suggesting that the below-average
spending understates the impact of the spending in terms of its more targeted nature.
What is missing from the picture?
Estimates of non-government expenditure sourced through fees or fund-raising are an important
information gap, as are estimates of expenditure on capital. For example, the currently available data
do not allow analysis of how expenditure on welfare services by individuals has changed over time.
It is unclear whether individuals are now paying a greater proportion of the cost of welfare services
or less. It is also unclear how much is being spent on infrastructure and equipment to support
welfare provision, and who is paying.
As noted above, the expenditure estimates that we have been able to collate for this article do not
include expenditure for some welfare services and cash payments covered in other parts of this
report. This is due to lack of readily available data suitable for incorporation into the estimates. For
similar reasons, some important disaggregations (such as between Commonwealth and state/
territory government expenditure) have not been included.