- Australia’s government is due to unveil the 2022-23 federal budget on 29 March just weeks away from a federal election expected in May
- The Treasurer faces calls to reframe the budget around measures of wellbeing, rather than conventional economic indicators such as GDP and debt.
- CA ANZ policy experts say the budget should focus on how the economy grows and ensure that investment delivers long term, sustainable value.
Australia’s economy is powering along. Official forecasts put real GDP growth this financial year and next at 3.5% and 2.25% respectively1. Unemployment is at a 13-year low of 4.2%, while average weekly earnings rose 3.8% over the past year2.
And yet some 3.2 million people live in poverty, a rate unchanged for more than a decade3. A generation is priced out of home ownership4. Income inequality has widened over two decades5. Bushfires, drought, floods, and the prospect of worsening climate change affect many people's wellbeing.
Conventional economic measures, such as GDP or employment, don’t measure quality of life or wellbeing – or even whether we’re achieving the kind of outcomes society expects.
‘Is life in Australia getting better?’ was a question at the heart of a series called Measuring Australia’s Progress by the Australian Bureau of Statistics, a program axed in 2014 due to government funding cuts after more than a decade of data collection and reporting.6
It was also central to Treasury’s wellbeing framework, developed in the early 2000s to guide policymakers. That, too, was scrapped in 2015 to bring the focus back to economic growth and employment.7
So, should Australia’s most comprehensive annual statement of economic policy, the federal budget, focus more on measures of societal outcomes, especially after the COVID pandemic’s far-reaching impact on people's lives — when 3.5 million Australians had to access JobKeeper payments?
CA ANZ policy experts say it should.
“Reframing the budget from money in and money out to the main policy outcomes provides an opportunity to ask: ‘what are we seeking to achieve in this budget?’,” says Karen McWilliams, CA ANZ’s business reform leader. “Government funding can then be directed to support those outcomes and report on the progress towards achieving them.”
In a submission to the government ahead of the 2022-23 Federal Budget, CA ANZ said Australia’s budget should aim to build a more resilient country, better prepared for the future, and that its commitments and investments “should improve the lives of disadvantaged people and include broader measures to contribute to everyone's wellbeing.”
The budget should play a key role in determining how Australia’s economic policy delivers positive outcomes in critical areas of wellbeing, the submission said. That requires a thorough examination of measures of many different domains of life, such as physical and mental health, housing, inequality, education, safety and environmental quality, among others.
“With the pandemic, for instance, we've seen a lot more focus on measuring the success of policies based on actual health outcomes such as the number of cases, hospitalisations and deaths,” McWilliams says, “rather than the economic impact and the cost of everything governments have done to try and control it.”
New Zealand introduced a Wellbeing Budget in 2019, and although it met with a mixed response and the government is still evolving its approach, the initiative sparked an important debate about what government economic policy is seeking to achieve, she says.
Reframing the budget from money in and money out to the main policy outcomes provides an opportunity to ask: ‘what are we seeking to achieve in this budget?’
“Sustainability, too, has now become mainstream thinking and it’s critical to long term value and growth,” says McWilliams. “We need to be mindful that it’s not just economic growth, which is important, but critically how we grow so that we focus on the right areas in the long term because we don’t want to exhaust resources that future generations will need.”
CA ANZ’s call to reframe fiscal policy around wellbeing reflects the OECD’s own expectations of its member governments. It adopted a Framework for Measuring Wellbeing and Progress in 2009 and launched the Better Living Initiative in 2014.
Late last year, the OECD’s report on COVID-19 and Wellbeing said the pandemic had had “far-reaching consequences for how we live, work and connect with one another.” It showed that where people worked, their gender, age, race and ethnicity, education and income levels affected how the pandemic affected their lives. It also revealed that more people adopted unhealthy rather than healthy behaviours during the pandemic, such as eating more and exercising less.
“The report argues that a wellbeing lens can prompt policy-makers to refocus on the outcomes that matter the most to people,” the OECD said, “to redesign policy content from a more multidimensional perspective, to realign policy practice across government silos and to reconnect people with the public institutions that serve them.”
1 Australian government, MYEFO, December 2021
2 Australian Bureau of Statistics, February 2022
3 Poverty in Australia 2020, ACOSS and UNSW
4 ABC, 14 June 2021, ‘Nearly two-thirds of Australians think home ownership won't be an option for young people as property prices rise’
5 The Conversation, March 2017
6 The Conversation, ‘Beyond GDP – how Australia could help redefine wellbeing,’ Oct 13, 2015
7 Sydney Morning Herald, 21 Oct. 2016, ‘Treasury secretary John Fraser ditches wellbeing as the rest of the world catches on’
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