“Australians know this is a time of great challenge and change. The global economy teeters again, on the edge – with a war that isn’t ending, a global energy crisis that is escalating, inflationary pressures persisting, and economies slowing – some of them already in reverse.” Federal Treasurer Jim Chalmers, 25 October 2022
A large part of Australia’s past economic success has been through population growth, exporting raw materials extracted from the ground and a strong agricultural sector with high quality products from stock and land. These elements have spurred our growth and helped us earn the moniker of the ‘Lucky Country.’
However, we are at an inflexion point.
On a global level, the war in Ukraine, political and social unrest in the United States and the UK and concerns regarding China’s trade status with Australia are creating political uncertainty and impacting on confidence for investment and commodity prices. Navigating these global concerns and the impacts of the pandemic have meant that many have been re-assessing priorities and what is important to us as a community.
These priorities have included concerns regarding climate change and the need to balance growing environmental and social issues with economic factors.
However, standard economic wisdom has been linked to the idea of increasing wealth through economic growth measured by rising GDP. We have believed that if GDP rises, by default, living standards and opportunities would flow through to all.
Yet with escalating inflation and interest rates, many Australians are feeling the squeeze. We also have significant issues with access to affordable housing as prices have escalated during the pandemic. In global terms, we are a wealthy country, yet inequalities still abound. How do we start looking for a new way to support our economy and our community?
This week, we saw the first Budget from the new Federal Labor Government. The narrative from the Treasurer Jim Chalmers focused on the challenges we are facing and the ability for Australians to be resolute and resilient in hard times. While the Budget process rightly aims to balance debt with spending to support economic growth, the world is changing so rapidly, perhaps it is time to start considering new ways of understanding ‘prosperity’.
Since 2011, the Social Progress Imperative has measured non-economic dimensions of social performance across the globe. The annually published Social Progress Index helps to understand how people across the world are living, who is being left behind and how to accelerate progress.
A key finding in 2022 is that the world population has faced a considerable recession in personal rights since 2011. Overall, personal rights have deteriorated for 112 countries since 2011, including four G7 countries – the US, the UK, France and Canada.
The Personal Rights component scores are estimated based on six key indicators: freedom of religion, property rights for women, freedom of peaceful assembly, access to justice, freedom of discussion and political rights.
This year’s index highlights that if we don’t find a way to dramatically alter our course, we are likely to be heading into a social progress recession as early as 2023. The legacy of Covid is one of the causes of the slowdown. Given risks from climate change, economic turbulence and political change there is significant risk that the world’s social progress will retreat in 2023.
Perhaps it’s time for us to consider a balance when measuring growth which includes social and economic prosperity.
Jennifer Cromarty
CEO, Committee for Geelong