Industries with the Highest Labor Costs in Australia in 2021

1. State Government Administration in Australia

Labor Costs for 2021: $141.1B

The State Government Administration industry is made up of the eight state and territory governments across Australia. Under the Australian Constitution, state and territory governments are responsible for everything that is not a Federal Government responsibility. This includes, but is not limited to, schools, hospitals, roads and railways. This report includes all actions that state and territory governments undertake. As a result, it double counts key information with other industries in Australia. For example, teachers employed in government schools in Australia are included as employees in both the State Government Administration industry and the Government Schools industry. State and territory... Learn More

2. Health Services in Australia

Labor Costs for 2021: $82.7B

The Health Services subdivision includes a range of health services and facilities. General hospitals are the subdivision's largest revenue driver, accounting over half of Australia's health services revenue. General practitioners, clinical specialists and dentists also represent significant revenue streams for the subdivision. Australia's growing and ageing population has generated strong demand for health services over the past five years. However, the outbreak of COVID-19 in early 2020 has limited subdivision expansion, as health services have redirected resources to containing the virus. Consequently, subdivision revenue is expected to grow at an annualised 1.5% over the five years through 2020-21, to $162.5... Learn More

3. Professional Services in Australia

Labor Costs for 2021: $58.7B

The Professional Services subdivision provides various professional, scientific and technical services to a range of markets. The subdivision's performance is largely linked to overall economic conditions, which often determine business confidence and capital expenditure. Prior to the COVID-19 outbreak, technology development and greater business profit drove growth across the subdivision. Over the three years through 2018-19, accounting and management consultants benefited from downstream businesses looking to improve efficiencies as increased globalisation constrained profit margins. The COVID-19 pandemic has negatively affected the subdivision's largest industries, including the Engineering Consulting industry, the Management Consulting industry and Accounting Services industry. The subdivision is... Learn More

4. Public General Hospitals in Australia

Labor Costs for 2021: $45.0B

The Public General Hospitals industry has grown over the past five years. Public hospitals are primarily funded through federal and state governments, with private health insurance and other non-public revenue sources expected to account for less than 10.0% of industry funding in 2020-21. Demand for public general hospitals has surged over the past five years, primarily due to Australia's ageing population and the rising incidence of chronic illness among adults. Industry revenue is expected to increase at an annualised 1.8% over the five years through 2020-21, to $77.7 billion. This includes anticipated revenue growth of 2.1% in the current year.

The... Learn More

5. Community Services in Australia

Labor Costs for 2021: $37.2B

Organisations in the Community Services subdivision play an important role in supporting Australia's welfare system. Subdivision operators help to arrange care and counsel for individuals in need, including the economically disadvantaged and other vulnerable members of society, such as children and the elderly. Not-for-profit organisations and private enterprises in the subdivision are expected to receive $70.0 billion from government funding, donations and private income in 2021-22. Subdivision revenue is expected to increase at an annualised 4.3% over the five years through 2021-22. Favourable demographic trends and ongoing government funding have contributed to revenue growth. The COVID-19 pandemic has also supported... Learn More

6. Government Schools in Australia

Labor Costs for 2021: $32.0B

The Government Schools industry has grown due to rising student numbers and government funding over the past five years. The industry receives most of its income from the federal, state and territory governments, with state and territory funding providing approximately 80% of revenue. Political debate surrounding school funding has introduced volatility to industry revenue over the past five years. However, student enrolment numbers have increased over the period, driving growth in revenue. Overall, industry revenue is expected to rise at an annualised 0.5% over the five years through 2025-26, to total $53.1 billion. This includes an anticipated increase of 1.3%... Learn More

7. Finance in Australia

Labor Costs for 2021: $30.5B

The Finance subdivision's operating environment has been challenging over the past five years, due to falling interest rates. Residential property prices have risen over the period, supporting demand for mortgages. However, volatile business confidence over the period has limited growth in capital expenditure from the private sector and overall demand from commercial clients. Overall, subdivision revenue is expected to decline at an annualised 2.2% over the five years through 2021-22, to $186.7 billion. Subdivision revenue is anticipated to rise by 1.9% in 2021-22, as most operators have closed and wound down deferrals on loan repayments during the COVID-19 pandemic.

The RBA's... Learn More

8. Computer System Design Services in Australia

Labor Costs for 2021: $27.3B

The Computer System Design Services industry consists of a large number of businesses that develop and implement information technology services, programming systems and business solutions. Despite the COVID-19 pandemic, the industry has expanded strongly over the past five years, as many client businesses have outsourced non-essential systems operations, and as computers and IT systems have required regular upgrades and enhancements. Furthermore, greater internet connectivity has driven the industry's growth over the period, with financial services providers such as banks and insurers remaining the industry's largest clients.

Due to strong demand, industry revenue is anticipated to increase at an annualised 4.6% over... Learn More

9. National and Regional Commercial Banks in Australia

Labor Costs for 2021: $24.7B

Revenue for the National and Regional Commercial Banks industry has declined over the past five years as the cash rate has fallen to record lows. Consistent cash rate cuts over the past five years, to a record low of 0.10%, have reduced industry revenue despite growth in lending volumes. Banks have increased interest rates on various mortgage and business lending products out-of-cycle at times over the period due to higher capital adequacy requirements and tighter lending standards in an effort to maintain margins. However, this trend has been more than offset by falling interest rates over the period. In addition... Learn More

10. Consumer Goods Retailing in Australia

Labor Costs for 2021: $22.6B

The Consumer Goods Retailing subdivision has been subject to difficult retail conditions over the past five years. Weak disposable income growth and volatile consumer sentiment due to unstable economic conditions have resulted in a poor trading landscape, as households have scaled back their expenditure on non-essential goods. In addition, the rising popularity of online shopping has contributed to a fall in retail demand for many consumer goods over the period, such as photographic equipment, video games and recorded music, newspapers and books and stationery goods.

Subdivision operators have struggled with growing competition from online-only retailers, as consumers have become increasingly comfortable... Learn More