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Labor’s social spending budget blows out by $26b

John Kehoe, Michael Read and Cecile Lefort

Jan 6, 2025 – 5.00am

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The Albanese government is spending $26 billion more on aged care, disability, medicines and childcare than it first budgeted three years ago as Labor prepares to launch an unofficial election campaign focused on those key areas.

The cost blowout is due to a combination of higher-than-anticipated demand from consumers for government assistance, policy spending decisions and inflation which has pushed up the cost of service delivery.

John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s first election. He joined the Financial Review in 2008 from Treasury.

Michael Read is the Financial Review's economics correspondent, reporting from the federal press gallery at Parliament House. He was previously an economist at the Reserve Bank of Australia and at UBS.

Cecile Lefort is a markets reporter based in the Sydney newsroom.