Successful countries in our region were once dubbed ”Asian Tigers” because of their super-charged economic growth rates.
Australia is now registering tigerish results when it comes to growth in wellbeing. That’s the clear message of the Herald-Lateral Economics wellbeing index which provides a more holistic view of changes in the nation’s welfare than gross domestic product, which only measures economic activity.
The index puts a figure on wellbeing using five broad components – income, human capital, natural capital, inequality, health and job dissatisfaction. So what did they show this quarter?
Money is not everything but it is a major contributor to national wellbeing. The index uses national disposable income to help calculate wellbeing. This income measure has been affected lately by the rise and fall in the prices Australia gets for its mining exports. A year ago, when commodity prices were on the rise, this drove the wellbeing index higher. But in the past few months prices for some key mineral exports, especially iron ore, have fallen. As a result, national disposable income was relatively flat during the past quarter and grew by 2.6 per cent over the past year – substantially slower than GDP.
One of the nation’s most valuable assets is its human capital – the knowledge and skills of the population. Education is the key to building up the nation’s stock of this crucial asset. Knowhow has been the stand-out performer in the wellbeing index and the main reason it has grown much faster than GDP. This part of the index puts a figure on the total amount of adult formal qualifications in the labour force, the number of children in early schooling and the number of children in secondary schooling. Each one of these categories has improved markedly over the past year boosting our stock of human capital and the nation’s wellbeing in the process.
Depletion of the natural environment subtracts from wellbeing but the component of the index, which measures natural capital, did not have much influence on the overall wellbeing index during the last quarter and year. The cost of climate change is a consistent but relatively small drag on wellbeing.
Increasing life expectancy and fewer preventable hospital deaths have boosted national wellbeing. But this was more than offset by higher rates of obesity and mental health treatments. The index’s obesity component has been increasing faster than the other components. The wellbeing cost of obesity is up about 1 per cent for the quarter and 4.5 per cent for the year. Overall, health was a modest drag on the wellbeing index.
Every extra dollar means much more to a pauper than a millionaire so the distribution of income has a bearing on national well-being. National income grew during the past year and the uneven nature of its distribution meant that inequality was a small drag on national wellbeing.
This component of the index takes into account the non-economic affects of unemployment, underemployment and overwork. It was relatively flat over the quarter and the year.
The wellbeing index is a ray of sunshine at the end of a week when some economic indicators painted a gloomy picture. It draws attention to some positive trends, like our investment in education, that are often overlooked.
”The stockmarket has gone down in recent weeks – that’s one measure of what the future holds for us,” says Nicholas Gruen, the chief executive of Lateral Economics and lead author of the index. This index is another, more mechanical, less emotional measure of what the future holds and it’s looking quite strong, but that’s over the long term. It doesn’t say there won’t be ups and downs.”
smh苏州美甲学校.au – wellbeing index interactive graphic
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