Industries with the Highest Labor Costs in Australia in 2023

1. State Government Administration in Australia

Labor Costs for 2023: $151.1B

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 2023: $89.2B

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 (GPs), clinical specialists and dentists also represent significant revenue streams for the subdivision. Australia's growing and ageing population has supported demand for health services over the past five years. However, the COVID-19 pandemic has limited subdivision expansion, as health services have redirected resources to contain the virus. Consequently, subdivision revenue is expected to grow at an annualised 2.2% over the five years through 2022-23, to $197.8 billion. The industry's growth... Learn More

3. Professional Services in Australia

Labor Costs for 2023: $75.2B

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. Over the past five years, greater business profit, rising capital expenditure by the public sector and mostly positive business confidence have supported subdivision demand. However, the COVID-19 pandemic has disrupted several industries in the Professional Services subdivision, weighing on its performance. In particular, demand for architectural services, and surveying and mapping services fell over the years following the COVID-19 pandemic, as many construction projects were delayed... Learn More

4. Public General Hospitals in Australia

Labor Costs for 2023: $56.8B

The Public General Hospitals industry has grown over the past five years, supported in part by increased government funding. 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% of industry funding in 2022-23. Public hospitals services funding under the National Health Reform Agreement is expected to reach $27.3 billion in the current year, having steadily increased over the past five years. At the same time, demand for public general hospitals has risen over the past five years, primarily due to Australia's ageing population... Learn More

5. Community Services in Australia

Labor Costs for 2023: $46.7B

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 like children and the elderly. Favourable demographic trends and ongoing government funding have supported the subdivision's performance in recent years.

At the same time, the COVID-19 pandemic has shaped the subdivision's operating backdrop, with many Australians experiencing social and economic disadvantages, housing insecurity and mental health challenges arising from the prolonged pandemic. A series of high-profile cases of abuse, neglect and negligence among prominent... Learn More

6. Computer System Design Services in Australia

Labor Costs for 2023: $32.8B

The Computer System Design Services industry consists of many businesses that develop and implement information technology services, programming systems and business solutions. Despite the havoc caused by COVID-19 pandemic, the industry has expanded strongly in recent years, as many client businesses have outsourced non-essential systems operations, and as computers and IT systems have required regular upgrades and enhancements. Greater internet connectivity has fuelled industry growth, and financial services providers – including banks and insurers – have remained the industry's largest clients.

In response to robust demand, industry-wide revenue has been growing at an annualised 3.5% over the past five years and... Learn More

7. Government Schools in Australia

Labor Costs for 2023: $30.9B

The Government Schools industry has experienced modest revenue growth over the past few years. Ongoing population growth, including an expansion of the population aged between 5 and 18, has fuelled demand for public schools and kept revenue on the rise. Government funding has also been stable for government school; state and territory government funding makes up most funding for public schools, alongside some Federal Government funding. Donations and fundraising activities account for the remainder. Long-term climbs in household discretionary incomes have facilitated more donations from the community; however, the trend has also prompted a shift towards private education. Many parents... Learn More

8. National and Regional Commercial Banks in Australia

Labor Costs for 2023: $27.1B

Banks are grappling with a transition from years of loose monetary policy to tighter financial conditions. Soaring inflation has prompted an RBA pivot, in the face of surging energy, housing and food prices. The RBA has aggressively hiked the cash rate since May 2022. Prior to this, banks cashed in on high residential housing prices, with low interest rates and government schemes encouraging strong mortgage uptake over the course of the pandemic. APRA also eased the interest rate buffer in 2019, before raising it in 2021. Although a subdued cash rate cut banks' interest incomes, it was more than offset... Learn More

9. Temporary Staff Services in Australia

Labor Costs for 2023: $26.7B

Temporary staff service firms are susceptible to changes in the national unemployment rate, with lower unemployment contributing to greater demand for temporary staff in recent years. Trends towards greater business outsourcing have positively affected industry demand. Stable demand from several downstream markets has benefited industry firms, including professional services and healthcare sectors.

Before the pandemic, industry revenue grew rapidly. The pandemic disrupted the industry, causing revenue to decline slightly in 2019-20 and significantly in 2020-21. Previous strong industry revenue growth was due to falls in the national unemployment rate, which drove demand for temporary staff that industry firms supply. In contrast,... Learn More

10. Consumer Goods Retailing in Australia

Labor Costs for 2023: $25.7B

The Consumer Goods Retailing subdivision has been subject to volatile retail conditions over the past five years. The COVID-19 pandemic has caused economic uncertainty and restricted trading for extended periods in several Australian states. However, the pandemic has also prevented many consumers from spending money on hospitality and travel, allowing greater income to be spent on consumer goods. As a result, subdivision revenue is expected to increase at an annualised 2.4% over the five years through 2022-23, to $220.4 billion. This result includes an expected 7.8% decline in the current year, as easing COVID-19 restrictions increase competition for consumer spending... Learn More