The final consumption explains the goods and services purchased by consumers to satisfy their personal needs and purchase made by government to satisfy the collective needs of the community . The government’s final expenditure involves national consumption expenditure on defence, non-defence and state and local consumption expenditure . The “general government final consumption expenses” and “household final consumption expenses” of Australia from the year 2009 to 2016 along with the final consumption expenditure are presented in the Table 1 (Appendix).
The trend of each component of final consumption expenditure is represented in the following diagram. Movement of both components represents almost a straight line going in the upward direction. This indicates that “government final consumption expenditure” and “household consumption expenditure” has risen each year without any fall or fluctuations. It is also important to note that government consumption expenditure is significantly lower than the household final consumption. In fact, the household consumption expenditure is almost thrice than the government counterpart every year.