Treasurer to measure ‘wellbeing’ pay-off from economy in first budget

Treasurer Jim Chalmer’s first budget will contain an evaluation of the nation’s wellbeing, tracking Australians’ standard of living and quality of life alongside traditional measures of the economy.

Chalmers will use an address to the Australia New Zealand Leadership Forum in Sydney on Friday to reveal the October 25 budget would contain more than just economic indicators such as unemployment and GDP.

Jim Chalmers’ first budget will contain measures of Australia’s wellbeing. He has also tasked Treasury with modelling the impact of climate change.Credit:AAP

In his address to the forum, Chalmers will say the wellbeing budget – modelled on similar initiatives in countries such as New Zealand and Canada – would show the government was focused on how the economy was helping the country in areas as diverse as life expectancy and quality of the environment.

“We need to ensure growth is broad and inclusive and given our fiscal constraints that means ensuring our policies are geared towards multiple objectives at once,” he will say.

“At a time of record debt and budget pressures and cost-of-living pressures, value for money is essential and we judge it by what it means for the right kind of growth, including sustainable income growth.

“But we should also judge our policies, including our economic policies, against agreed markers of progress.”

Treasurer Jim Chalmers wants to start measuring people’s wellbeing in the federal budget.Credit:Getty

New Zealand has progressed the most of several countries that have introduced standalone wellbeing budgets or incorporated measures of wellbeing into their formal traditional budgets.

It included measures around climate change, child poverty, GDP per capita, cost-of-living pressures and outcomes for Indigenous people.

The wellbeing budget planned for October will include some preliminary measures such as life expectancy. But it is expected to start a discussion about other measures that could be incorporated into future wellbeing budgets.

Chalmers first raised the concept of a wellbeing budget in early 2020. Then treasurer Josh Frydenberg ridiculed the idea, saying Chalmers would walk into the Parliament to deliver the budget with “beads in one hand” while MPs would sit on meditation mats.

In his speech, Chalmers will pay tribute to his New Zealand counterpart Grant Robertson for the work he has done on the Kiwi wellbeing budget.

“His wellbeing approach has significantly reshaped the conversation in New Zealand about the budget and the economy,” he will say. “I want Australia to have a similar conversation about how we can better improve policy design, evaluation and priority setting.”

US Nobel laureate in economics, Joseph Stiglitz, said the economy was far more than just a measure of GDP.

Stiglitz, who had a private meeting with Prime Minister Anthony Albanese on Thursday while in Australia on a speaking tour, said governments had to show that they were focused on economic and societal outcomes.

“I think it’s a great idea which a number of countries are now adopting. At a time when money is pretty scarce, you have to do more with every dollar – you have to make sure you get double or triple the value from each one,” he said.

“Governments have to find a way to meet broader objectives to society.”

Stiglitz said measures of wellbeing could vary between countries, noting in the United States an indicator of violence or inequality would be useful.

He said Chalmers should look at climate change and its impact on Australia.

“Something that GDP doesn’t capture is the environmental costs of climate change. Measuring wellbeing around climate would,” he said.

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