Australia government spending rises in Q3, adds to GDP

[SYDNEY] Australian government spending posted another solid rise in the September quarter as a host of fiscal stimulus programmes supported incomes and employment in the wake of nation-wide coronavirus lockdowns.

Spending on operational items rose 1.4 per cent in the third quarter from the previous quarter to an inflation-adjusted A$103.79 billion (S$102.3 billion), the Australian Bureau of Statistics reported on Tuesday.

Investment in fixed assets by the government and public enterprises rose 0.3 per cent to A$25.62 billion.

The ABS said the 1.2 per cent increase in total public sector demand was expected to contribute 0.3 percentage points to real gross domestic product (GDP) in the quarter.

Public spending accounts usually for around 24 per cent of GDP, data for which are due on Wednesday. Analysts forecast GDP rebounded by around 2.5 per cent in the third quarter, partially recovering the previous quarter's huge 7.0 per cent decline.

REUTERS