Government purchases combine all goods and services bought by all forms of government: form paper clips to bridges and hospitals. This does not include government payment for work or any transfer payment.
As a single entity, the government is the largest purchaser in a nation. It buys all kinds of products: from hospitals and bridges, to paper and pens (so we can fill out all these forms). It also spends large sums on services such as those provided by firemen and policemen.