The latest data from the Australian Institute of Health and Welfare shows how dental care is funded in Australia compared with other areas of health.
By Matt Hopcraft – Republished from Dental as Anything
Dental health expenditure care in Australia continues to grow, according to the latest data from the Australian Institute of Health and Welfare. In 2024-25 $14.1 billion was spent providing dental care, an increase of 7.4% from the previous year.
This report provides an overview on key economic aspects of dentistry in Australia over the past 16 years as it relates to expenditure, source of funding and international comparisons based on a range of publicly available data sources.
Summary
- Total dental expenditure for 2024/25 was $14.1 billion, representing 5.2% of total recurrent health expenditure
- This was an increase of 7.4% in dental expenditure over the previous year, slightly greater than the 7.3% increase in total recurrent health expenditure
- Over the past 16 years, the average real rate of growth of dental expenditure was 4.3%, compared with 5.7% for total recurrent health expenditure
- Dental expenditure is predominantly paid by individuals, either directly out of pocket ($8.59 billion) or via private health insurance rebates ($2.82 billion)
- The Federal government contribution to dental expenditure was $1.57 billion, with nearly 60% ($921 million) subsidising private health insurance
- Federal government funding for direct dental care (not including the subsidising private health insurance) peaked at $956 million in 2011-12 and has nearly halved since then.
- Over that time, the federal subsidy to private health insurance for dental treatment has increased 52%
- State and territory governments contribute $1.1 billion funding public dental services
- Australia ranks 25th of 32 OECD countries for the proportion dental expenditure funded by government
Trends in Dental Expenditure
Dental expenditure in Australia has been increasing over the past 16 years. In 2024-25, total expenditure on dental care from all sources was $14.1 billion. This represents an increase of $974 million from the previous year and is nearly double the $7.7 billion spent in 2009-10. The annual increase in dental expenditure was steady at around 3.3% per year until access to dental care was impacted by the COVID-19 pandemic in 2020. However growth in the past three years has averaged 8.4%.
The average yearly increase in dental expenditure in current prices between 2009-10 and 2024-25 was 4.3%, increasing every year except for the first year of the COVID-19 pandemic, when expenditure declined 7.4% in 2019-20. The annual increase in dental expenditure was steady at around 3.3% per year until access to dental care was impacted by the pandemic in 2020. However growth in the past three years has averaged 8.4%. After adjusting for inflation, the average real rate of growth between 2011 and 2025 was 1.3%.
Health Expenditure by Area of Service
In 2024–25, total recurrent spending on health in Australia was $272.95 billion, with the majority spent on public and private hospitals (45.2%), medications including benefit-paid pharmaceuticals (12.8%), referred (9.6%) and unreferred (5.8%) medical services, and other services such as research, patient transport, aids and appliances and administration (11.1%). Dental services accounted for 5.2% of total recurrent health expenditure.
However, despite the growth in dental expenditure, there has been a steady decline in the proportion of overall health expenditure attributable to dental care, from 6.6% in 2009-10 to 5.2% in 2024-25.
Dental expenditure per person has increased from $349 in 2009-10 to $512 in 2024-25.
Sources of Funding
Broadly, funding for health services comes from either government or non-government sources. Federal government dental expenditure is a mix of funding for the Child Dental Benefits Schedule, Department of Veterans Affairs, funding provided to states and territories for their public dental services through a Federation Funding Agreement and health insurance rebates to incentivise individuals to have private health insurance. State/territory governments fund public dental services for eligible patients.
Non-government or private funding is a mix of out-of-pocket payments and health insurance payments for dental services. Other funding includes non-government sources such as injury compensation insurance providers, non-patient revenue of private hospitals, and other private spending.
In 2024-25, 71.5% of all recurrent health expenditure was funded by governments (41.7% Australian government and 29.8% state/territories), with only 17.0% from individuals out-of-pocket. However, individuals directly funded 60.8% of dental expenditure in out-of-pocket expenditure and indirectly funded a further 19.9% via private health insurance. Governments contributed only 18.9%, with state/territory governments funding 7.8% and the Australian government 11.1%.
The federal government contribution to dental expenditure comprised $538 million for the Child Dental Benefits Schedule and the Federation Funding Agreement to support state/territory public dental services, $106 million for Australian Defence Force veterans via the Department of Veterans Affairs, and $921 million as premium rebates for private health insurance attributable to dental treatment.
Dental services have the lowest proportion of government funding across a range of health areas, including public and private hospitals, community health services, referred and unreferred medical services and benefit-paid pharmaceuticals.
In 2024-25 the Australian government spent $106.1 billion on health care, but only $1.46 billion on dental care, representing 1.4% of their total recurrent health spending. The proportion of Australian government funding allocated to the provision of dental services peaked at 2.8% in 2011-12 and reached a low of 1.2% in 2021-22.
Individual out-of-pocket expenditure and private health insurance are the major drivers of increased dental expenditure, whilst state government spending growth has been modest and federal government spending has declined (with the exception of the private health insurance premium rebate which has nearly doubled over the past 16 years).
Dental care is the only area where federal government expenditure has declined, whilst other areas of health have seen significants increased in government investment.
States and Territories
Victoria and Western Australia had the lowest proportion of government (state and federal) funding for dental care, whilst Queensland and South Australia had the highest.
The highest dental expenditure per person was seen in Western Australia ($667), Northern Territory ($658) and Victoria ($641), and lowest in South Australia ($364) and Queensland ($356). The Northern Territory had the highest per capita state funding for dental care ($68), more than double that of the ACT ($33) and Victoria ($33). Individual out-of-pocket dental expenditure was highest in Northern Territory ($461) and Victoria ($473), and lowest in Queensland ($155) and South Australia ($119). A greater share of the private health insurance rebate went to people living in Western Australia ($43 per person) and South Australia ($42 per person), with people living in Victoria ($28 per person) and the Northern Territory ($26 per person) receiving the least.
International Comparisons
Australia ranked 27 of 38 across OECD countries in 2022 for the proportion of government spending on health overall, at 72.8%. Germany (86.7%) and Luxembourg (86.1%) had the highest proportion of health spending paid for by governments, and Mexico (51.9%) and Chile (58%) had the lowest.
However, there is a much greater disparity across OECD countries in the proportion of government funding specifically for dental care. Again, Australia ranks poorly at 25 out of 32 countries at only 12.3%, with significantly higher government contributions from countries such as Denmark (37.1%), Sweden (41.1%), France (65.8%), Germany (71.2%) and Japan (78.6%).
Of significant concern, government funding of dental care as a proportion of all spending has been going backwards in Australia, declining from 18% in 2005 to 12.1% in 2022.
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