Government sector spending accounts for 30 – 50 percent of GDP in the vast majority ofcountries and exerts influence over many commercial industries. Governmental support and stimulus packages have been critical to communities and industries through the COVID-19 pandemic, but there is likely to be unprecedented and lasting impact on public debt and future spending capacity. However, it has been a complex picture, with the pandemic impacting different parts of the government sector in different ways leading to a mix of economic recovery paths for state and local governments with 33 percent in ‘surge’ mode, 20 percent in ‘modified business as usual’, 40 percent in ‘transform to re - emerge’, and 7 percent in ‘hard reset’. Essentials such as digital healthcare, human/social services, defense, economic and stimulus spending have surged; infrastructure will bounce back quickly either because of its essential nature or its role in driving economic recovery; non-essential sectors such as elective healthcare and public transport volumes will take longer to recover; while harder hit sectors such as overseas development, airports, ports, and non-COVID-19 healthcare research are delayed indefinitely. National government will continue to influence state and local projects and priorities.