May 2012 - PBS expenditure now falling in real terms Figure 1 Recent PBS data shows no growth in real terms - Growth in government expenditure on the PBS in the 12 months to 31 March 2012 was just 0.8%. After adjusting for inflation, currently at 1.6%, this represents a decline of 0.8% in real terms. This is well below the Government’s own target of two per cent growth in real terms. The decline in expenditure is likely to continue, as the largest single set of price reductions in the history of the PBS took effect on 1 April 2012 and the impact of these reductions has not yet shown in the official figures. The PBS reforms are working - the Government is on track to save $1.9 billion dollars over the forward estimates and the current lack of (real) growth reinforces the industry’s long-held position that PBS is well under control.