Australia’s first wellbeing budget: A paradigm shift in government priorities
In a groundbreaking move, Treasurer Jim Chalmers has unveiled Australia’s first-ever wellbeing budget, officially known as the Measuring What Matters: National Wellbeing Framework. This innovative approach to budgeting aims to bridge the gap between financial prosperity and the social wellbeing of the Australian community, prioritising the needs of real people over abstract fiscal concepts.
Chalmers emphasised that budgeting should not merely revolve around numbers and economic indicators like budget surpluses or deficits. Instead, it should encompass a comprehensive assessment of how financial decisions made by the government impact the lives of citizens and the nation as a whole.
“The traditional measures are important, but they don’t give the full picture,” Chalmers said. “The government’s primary focus is addressing inflation and laying the foundations for future growth, but it is important that we simultaneously work on better aligning our economic and social goals in our communities and right across the country.”
The newly introduced Wellbeing Framework intends to serve as a measuring tool that draws together all aspects of government activities, guiding policies and spending towards promoting the well-being of the people. Chalmers further expressed that such a shift is necessary to assess the social costs of achieving budget surpluses and to ensure that the benefits are equitably distributed among the population.
However, the Framework has not been without its critics, with detractors primarily coming from conservative media outlets such as News Corporation, Nine Media and Seven West Media. Critics have been quick to pinpoint minor flaws in the report, magnifying these issues in an attempt to undermine the initiative. Nevertheless, Chalmers has defended the Framework, suggesting that social scientists have been effectively measuring similar indicators for decades, and it is high time the government takes notice of their findings.
The Wellbeing Framework is examines 50 key indicators, ranging from life expectancy and job satisfaction, to health outcomes, mental health, environmental issues, financial stress, and safety. Several countries, including Scotland, New Zealand, Finland, Wales, Germany, Iceland, and Canada, have already implemented wellbeing budgets successfully. The positive impact of these initiatives on their respective societies serves as evidence that such a shift in budgeting can be effective.
Former Treasurer Josh Frydenberg dismissed and ridiculed the wellbeing concept in 2019 – offensively alluding to ashrams, incense, and lewd commentary about ‘yoga positions’ –but alternative approaches are necessary to ensure the wellbeing of the nation, rather than solely focusing on crude statistical measurements that focus primarily on budget surpluses and deficits. The success of the Wellbeing Framework lies in its ability to account for the social consequences of financial decisions, paving the way for a more holistic and sustainable economy.
The media’s reception of the Wellbeing Framework has been mixed. While some media outlets lauded the initiative as a crucial step forward, others have resorted to criticism, displaying a lack of understanding and, at times, resorting to baseless and childish attacks, which simply support their anti-Labor narrative, rather than looking at the merits of alternative – and better – ways of ensuring the finances of the federal government are working towards the wellbeing of the community, and a more comprehensive evaluation of social, cultural, and political impacts on the people that make up an economy.
The Liberal Party shows that it has nothing to offer
Conservative opposition parties, particularly the Liberal and National parties, have also been quick to criticise the Wellbeing Framework. However, given their delivery of poor budget outcomes between 2013–2022, their attacks have been shallow and lacking in substance. Former Treasurer Joe Hockey’s 2014 budget faced significant backlash and almost ground the economy to a halt, while Scott Morrison’s subsequent budgets also caused economic difficulties.
Moreover, the recent budgets presented by Josh Frydenberg, which centred on significant cost-cutting measures, failed to garner enough support for passage, and saw the economy heading towards recession in late 2019, with only the onset of the COVID pandemic stopping his reputation as a financial manager deteriorating even further.
It’s evident that these critics from the opposition want to avoid a focus on social and cultural impacts because it adds another level of scrutiny to their budget proposals. They question the need for additional considerations beyond traditional economic measurements, suggesting that these new perspectives may not reflect well on their budgetary decisions.
The primary functions of a wellbeing economy
However, proponents of wellbeing budgets and the new economic thinking it embodies, such as economist Professor Mariana Mazzucato and Chief Executive Officer at VicHealth, Dr. Sandro Demaio, stress the importance of incorporating human factors into budgetary decisions. They advocate for a reorientation of economic activities around health and wellbeing, emphasising the need to create fiscal space for comprehensive health measures. Mazzucato further encourages forging symbiotic relationships between public and private actors, working together to achieve common goals.
Demaio highlights three fundamental aspects of a wellbeing economy approach: long-term planning, equal value to social, health, and environmental markers of success, and prioritisation of essential areas like housing, education, social and employment issues, and preventative health. These perspectives argue for a more inclusive and equitable economic model, prioritising the wellbeing of all citizens and future generations.
Despite the support from economists and experts, some members of the mainstream media remain hesitant to embrace these new ideas fully. They often gravitate towards conventional political figures and conservative ideologies. Critics argue that the media’s reliance on these voices fails to present a more diverse and informed discussion on the potential benefits of a Wellbeing Budget.
The debates surrounding the Wellbeing Budget reflect Australia’s broader crossroads when it comes to economic, political, environmental, and social reforms. As the country continues to grapple with the ongoing effects of the COVID-19 pandemic, the opportunity for governments to implement progressive approaches to problem-solving becomes paramount.
In contrast, the opposition’s approach has been uninspiring, obstructing progress without presenting viable alternatives. The lack of a clear and defined purpose for the opposition has raised concerns among the public, who expect constructive contributions to the national debate on critical issues.
Broader economic thinking
As the discussions evolve, the Wellbeing Budget and the broader new economic thinking behind it remain points of contention and hope for the future. While opposition parties continue to resist, many experts and citizens call for a more inclusive and compassionate economic model that benefits all members of society.
Australia’s path towards reform will require innovative ideas and a willingness to challenge established norms. Whether the Wellbeing Framework becomes a permanent fixture or not, it has undoubtedly opened the door to broader discussions about the nation’s future and the wellbeing of its people.
The success of the Wellbeing Framework will depend on how well it is embraced and implemented over the next few years. However, it may revolutionise budgeting practices and serve as a model for other countries looking to create more inclusive and people-centric economies.