Progress and wellbeing: more than GDP and tax cuts

Why does economic growth alone no longer seem to be enough to guarantee electoral support? The election results and a poll by the Swinburne Institute for Social Research taken after the election show that there was a reaction amongst many voters against the preoccupation with the
economy during the last couple of decades.

Economic growth is not what determines economic security for most people. Pollsters report that many people feel that obsession with the economy has marginalised
attention to their concerns about health, education and the environment.

There is growing recognition that economic
activity is a means to the end of human wellbeing rather than an end in itself, and that the economy should be the servant of society rather than society the servant of the economy.

This view is supported by the dominant trend in public comment on the tax cut proposals made by both the Liberal and Labor Parties during last year’s election campaign, which indicated stronger support for action to reduce greenhouse gas emissions and improve health services and
education than for another round of tax cuts.

The factors which influence the wellbeing of each of us differ, but research in many countries has led to the conclusion that total wellbeing has social, economic, environmental, psychological, physical and spiritual dimensions.

Objective influences on wellbeing include life expectancy, health, income, nutrition, employment, education and democratic participation. Other influential factors include relationships with family and friends, work-life balance, personal safety and freedom and a sense
of purpose and progress towards achieving individual and community goals.

Importantly there is increasing evidence that individual wellbeing and happiness is strongly affected by a sense that our paid and unpaid work contributes to the common good as well as to our own wellbeing. In other words our happiness depends on the wellbeing of others as well as on our individual situations.

Fortunately the Australian Bureau of Statistics has recognised for some years that wellbeing depends on far more than income and wealth. Dennis Trewin, the previous Australian Chief Statistician, wrote that, ‘around the world a
consensus is growing that countries and governments need to develop a more comprehensive view of progress, rather than focusing mainly on economic indicators such as Gross Domestic Product’.

The Bureau’s annual report on Measures of Australia’s Progress includes indicators relating to the lives of individuals, the environment and living together as well as the economy.

The individual and social indicators include health, education, training and work and those for society on social cohesion, crime and public participation in governance. Environmental indicators include threatened species, air and atmospheric quality and overfishing.

Regrettably, the Howard Government had little interest in these broader measures of progress, but they are being kept up to date and are available to the Labor Government if it chooses to use them.

The European Union and many other member states of the UN are also adopting broader measures of progress. The EU is now attempting to integrate economic, social and environmental strategy. Rather than measuring progress simply in terms of growth of national income, four strategic pillars have been adopted: employment, social inclusion and sustainable development as well as economic growth.

The EU has set fourteen indicators which are more revealing than those conventionally used against which to judge progress. For example, growth is measured by purchasing power per person; employment by the participation rate
of people aged 15 to 64; social inclusion by the poverty rate and differences in employment rates between regions; and environmental sustainability by greenhouse gas emissions.

Governments cannot, of course, solve all the concerns which affect the wellbeing of individuals and communities. Some dimensions of happiness and wellbeing are factors which government can do only a little to influence, like the quality of relationships between family and friends. Others such as economic security, health, housing affordability, environmental sustainability, cultural vitality and democratic participation are strongly influenced by public policy.

In Australia the McCaughey Centre at the University of Melbourne has developed a range of indicators of local community wellbeing to support local community planning and policy making. These could be used as one starting point for
a national debate about broader indicators of wellbeing and progress.

This in turn could form the basis for a wide ranging public conversation about the kind of society, economy and environment we want to build and pass on to future generations.

One of many examples of policy change which could result from this approach would be to
give top priority to investing in early childhood education and reducing child poverty.
Australia’s early childhood programs are inadequate, covering only 36 per cent of three and four year olds in 2002, compared with
the average of OECD countries of 68 per cent.
Despite the research showing that early childhood is the most effective stage at which to influence educational outcomes, Australia is spending only 0.1 per cent of national income on pre-schooling compared with the OECD average of 0.4 per cent.

Greater investment in early childhood programs is also needed if the best quality services are to be available to all children and child poverty in Australia is to be reduced. Targets of cutting child poverty to 8 per cent or less by 2010 and to 3 per cent in 2020 would be
achievable with appropriate policies.

The election results and surveys of opinion taken around that time suggest that increasing numbers of people would welcome greater engagement in such discussions. It is encouraging that Prime Minister Rudd, Deputy Prime Minister Gillard and Treasurer Swan have each called for such public discussion.

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