Expenditure on recreation and culture

IBISWorld forecasts expenditure on recreation and culture to creep up by 1.2% over 2025-26, to a total of $142.5 billion. This increase is expected to be driven by rising discretionary income. While the economy is still facing high inflation, inflationary pressures have begun to gradually ease, with the Reserve Bank of Australia delivering several rate cuts through the second half of 2024-25 and early 2025-26. This trend has helped improve the income available for consumers to devote to recreational and cultural goods and services.

The proportion of total household consumption expenditure allocated to recreation and culture has risen strongly over the past five decades. During the 1970s, recreation and culture contributed less than 6.0% of total expenditure on average. By the late 1980s, expenditure had risen to just over 6.0%. Growth was more rapid over the 1990s and early 2000s, reaching above 8.0%. Expenditure on recreation and culture reached a peak at 10.0% of total expenditure in 2011-12 before boosting to nearly 11.0% for much of the next decade.

Spending on recreation and culture activities is highly discretionary and is measured by households' ability and willingness to spend their income. Discretionary income falling drastically in 2022-23 on the back of cash rate hikes. This has resulted in heightened living costs weakening individuals' ability to consume recreation and cultural activities. However, a rise in population has partly offset this effect. The government has increased funding towards the arts sector under the National Cultural Policy, Revive, since 2023, supporting individuals to participate in recreational and cultural activities like attending museums. These trends have fuelled an expected increase in expenditure on recreational and cultural activities over the past five years. Overall, IBISWorld forecasts expenditure on recreation and culture to climb at a compound annual rate of 3.3% over the five years through 2025-26.