The good economic units

By 2353NM

Wellbeing and politics have collided in the past couple of weeks. Federal Treasurer Dr Jim Chalmers has started a conversation about measuring the ‘wellbeing’ of the nation as a result of the measures in the budget. The Opposition, as you would expect, has poured scorn on the idea.

On a purely logical level, we have been measuring the economic effects of the budget measures for decades – even before the days of ‘the price of beer and smokes is up again’ so beloved of the headline writers in the 1960’s and 1970’s. Both sides of the political fence have promised to deliver economic nirvana on a number of occasions, some more successfully than others. We’ve also had the ‘debt and deficit disaster’, the tautologically impossible ‘already back in the black next year’, and those of a certain age probably will never forget the infamous ‘J Curve’ so beloved of Paul Keating when he was Treasurer. All of these measures were solely around the dollars and cents. How we all felt about austerity, recessions and so on that accompanied the mantras has never been recorded (or even seriously considered in all likelihood). We were all considered to be economic units that contribute in some way to make an economy work.

Going out to the expensive restaurant for dinner to experience the work of a talented chef rather than cooking at home, buying the 65-inch TV rather than the 43-inch version, adopting a pet or purchasing the battery with your solar panels usually makes no economic sense – but feeling good about your purchase is sometimes a valid reason to make the decision. That’s the difference between economic rationality and wellbeing. According to economists, the consumer is perfectly rational. Each decision may not be rational to others, but that’s not the point. Some will make a decision to purchase or do something to improve their wellbeing rather than improve their perceived economic condition by paying down the mortgage or saving for bills.

Measuring wellbeing rather than just the economic indicators will assist all in our community to feel safe, comfortable, validated and supported. We should believe we are living in a community that starts with those nearest and dearest to us, with a sense of belonging to our local area, our regional city, our state, Australia and the world. Each individual’s wellbeing and sense of belonging is more important in the long run than measuring if Australia has $999Million or $1Billion of debt.

Research

…conducted in the first week of October, shows 69 per cent of the 1020 respondents support a wellbeing budget, where the majority have defined “wellbeing” as keeping your mind and body healthy. Moreover, the economic imperatives of a focus on wellbeing are not lost on the Australian public, given just over a third of respondents felt their mental and physical health was “just okay”.

Drilling down to where the government should concentrate its efforts, an overwhelming majority of respondents – 73 per cent – wanted housing to be the priority, just in front of mental and physical health (71 per cent) and job and income security (70 per cent). Women rated these factors and others, including prioritising education and environmental quality, as extremely important focuses for the government – a crucial message given the prominent role women played in effecting change in the last election.

None of this should be a surprise, there are a number of theories expounding that humans have specific needs such as food, shelter and clothing to feel safe, secure and healthy. Governments in general have a role to play in the provision of these necessities, whether it be ensuring that food is safe to eat and affordable, ensuring adequate housing is available for citizens as well as provision of services such as energy, education, transportation and so on. In return the citizens are more productive, which in turn helps the economy.

The Governments of the ACT, New Zealand, NSW and other jurisdictions around the world are using, or planning to use, ‘wellbeing’ as an indicator of the effectiveness of their targeted budget economic measures. It is very easy for governments to deliver cash to those that they believe need the assistance, it is far more difficult to accurately assess who really needs the assistance in the first place. Use of wellbeing measurements can direct funding to where it is needed as well as assisting in deflecting claims the undeserving get all the government money.

During the pandemic, we found out quickly the important workers weren’t the senior management or directors of financial institutions, law firms, government agencies and the like. We found out the really important workers were the transport drivers, the carers of our aged, young and infirm and the producers of food, medicine and shelter, most of which are poorly paid and didn’t have the option to work at home, with genuine concerns about their health and ability to earn money. A lot of them are ‘just coping’ with day-to-day life. Measuring the country’s wellbeing can only help us identify if all sections of our community are ‘in a good place’ and if they’re not, take steps to make it happen.

The conservatives won’t like wellbeing measurements, because it won’t redistribute wealth upwards and they are still trying to convince us to be good economic units.

What do you think?

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This article was originally published on The Political Sword

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