CONSUMPTION

If a nation experiences income growth, there may be an increase in either consumption or saving or both. Among the different measures of consumption, final consumption expenditure is the most directly relevant to an assessment of progress as it provides an aggregate measure of societal living standards.

Over the past decade, growth in final consumption expenditure per capita has been quite strong. Between 1998–99 and 2008–09, final consumption expenditure per capita rose by an average of 2.0% a year, which was higher than the average growth experienced over the previous decade (1.8%).

Both households and governments contribute to final consumption. There were some fluctuations in the relative contributions of the two sectors during the past decade, but in both 1998–99 and 2008–09, households accounted for about three-quarters of the total and government for about one-quarter. The government contribution has declined slightly in the last decade, as government final consumption expenditure grew more slowly (3.1% on average) than household final consumption expenditure (3.6%) between 1998-99 and 2008-09. Expenditure on health and education were the largest components of government consumption throughout this period. For more detail on household expenditure, see the Household economic wellbeing section.