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Deficit deeper than economy

By Richard Eckersley - posted Friday, 4 October 2013


In a 2001 address to the Sydney Institute, Tony Abbott, then Employment Minister, spoke about the 'culture of despair' in Australia that he wanted to root out. The Government must 'handle the moral deficit as well as the budget deficit' and appeal to 'people's deeper values and beliefs', he said. 'Countries, no less than individuals, need a sense of purpose and meaning'.

In a newspaper article at the time, I argued that Abbott had not explored these issues. Instead he had resorted to the familiar refrain that governments needed to explain better how economics served society and how policies reflected community values. Much of his speech was a re-iteration of mainly economic statistics to show how well his Government had done.

So Abbott passed over the relationship between 'the moral deficit' and the 'budget deficit', I said. Yet it was this relationship that might offer the best insight into the public's disquiet. Perhaps the culture of despair stemmed from the sacrifice of the moral to the economic, from the failure to ensure that 'the things that matter most are not at the mercy of the things that matter least' (as a Jewish prayerbook warned).

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I went on to explain the ways in which a narrow focus on economic growth was detrimental to our quality of life and wellbeing. To eliminate the 'moral deficit', I concluded, we needed to focus less on the rate of growth and more on its quality. At the launch in 2000 of a World Bank report, Quality of growth, the bank's vice president and lead author of the report, Vinod Thomas, offered this analogy: 'Just as the quality of people's diet, and not just the quantity of food they eat, influences their health and life expectancy, the way in which growth is generated and distributed has profound implications for people and their quality of life'.

It says something about us and our politics that since 2001, our budget deficit has become all-consuming, while the 'moral deficit' is never discussed. Is this, then, the source of our continuing, and deepening, 'culture of despair', especially about our politics?

Let's not delude ourselves, as our political leaders delude themselves, about what a positive people we are, and how wonderful our future is. The truth is that our standard of living is unsustainable and our quality of life is declining, not because of the failure of government policies, but because of the failure of the paradigm of material progress on which they are based.

Here are a few examples of this failure taken from new research, both national and global (the two being closely linked):

Australia's 'material footprint', the total amount of primary resources required to service domestic consumption (so excluding exports and including imports), was 35 tonnes per person in 2008, the highest among the 186 countries studied.

Contrary to claims that economic growth is being uncoupled from resource consumption, and so sustainable, every 10 per cent increase in gross domestic product (GDP) increases the average national material footprint by 6 per cent. By 2050, a global population of 9 billion people would require an estimated 270 billion tonnes of natural resources to fuel the level of consumption of OECD countries - compared to the 70 billion tonnes consumed in 2010.

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It is not as if this unsustainable way of life is improving wellbeing in rich nations like Australia. A study of the genuine progress indicator or GPI (which corrects various anomalies in GDP to provide a better measure of economic welfare) for 17 countries, shows that global GPI per person peaked in about 1978, and does not increase beyond a per capita GDP of about $7000. Australia's per capita GPI peaked about the mid-1970s.

Surveys suggest Australians have become less satisfied with their lives over the past two decades, and less personally optimistic. More believe quality of life is getting worse than think it is getting better. Despite marked increases in mental-health funding, antidepressant prescriptions, and Medicare-funded psychological services, Australians' mental health has not improved since the 1990s, and may have declined among some groups. Obesity is continuing to rise - with weight gain highest among younger adults - leading to increased rates of diabetes and other health problems.

Earlier this year, a council officer in an affluent part of Sydney told me a survey of more than 1,000 young people aged 12-24 had found that, despite generally 'being happy with their lives on a whole', fit and in good general health, the vast majority (for young adults 75 per cent) said that they experienced symptoms of anxiety, stress and depression on a regular basis. 'For me, your work has transformed the muddle of issues and complexities that characterise modern western living into something comprehensible and hence more manageable.'

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This article was first published in the Canberra Times.



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About the Author

Richard Eckersley is an independent researcher and a founding director of Australia21, a non-profit, strategic research company. His work explores progress and wellbeing.

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