[October Budget 2022] Australia’s First Wellbeing Budget Leaves People Behind

With all the talk of restraint and fiscal responsibility, you may have missed that this was also Australia’s first wellbeing budget.

Measuring wellbeing reflects a long trend to move beyond narrow economic aggregates to better capture what matters to people’s lives.

Yet it is hard to understand how Australia’s first wellbeing budget can succeed if it fails to deliver for people experiencing poverty, including failing to raise JobSeeker payments.

Wellbeing budgeting

The October 2022-23 Budget compares national wellbeing frameworks from half a dozen countries, and draws on indicators developed by the OECD’s Better Life Initiative to assess Australia. The OECD’s index includes 82 indicators.

Australia is above the OECD average on 21 of the 32 indicators for which we have comparative data, including income and wealth, life expectancy and social interaction. The 2022-23 Budget’s Measuring What Matters statement shows Australia is underperforming when it comes to some environmental indicators, gender equity and household debt, with mixed results in relation to other key social, economic and political indicators.

Almost all the official efforts by the OECD and member governments to calculate wellbeing began shortly after the Global Financial Crisis of 2008 (GFC), and the austerity that followed. The GFC created a crisis of legitimacy for economics and budget orthodoxy, as global finance destroyed people’s lives and governments broke every mainstream fiscal rule to bail out corporate behemoths and households.

Today, debates over inflation suggest a return to the neoliberal politics of TINA (There Is No Alternative), that rejects attempts at more egalitarian policies as economically impossible. Yet, efforts to make visible different kinds of contributions and forms of value may still provide a longer-term strategic response to austerity.

However, efforts to challenge the myopia of mainstream economics and public budgeting reflect a strategic response to the rising power of market economics.

Counting for nothing

At least since Marilyn Waring’s famous Counting for Nothing: What Men Value and What Women are Worth first published in 1988, feminists have challenged the way we conceptualise and measure “productive” economic activity. For example, whilst destruction in Ukraine and the nuclear weapons that threaten our existence add to GDP, much of the unpaid care work which is carried out mainly by women, as well as “Caring for Country” activities of First Nations Australians, does not.

By the 1980s Australia’s femocrats – feminists working within the public sector – were developing budget tools to highlight gendered inequalities within policy. Responding to the growing power of economists in the central financial agencies, they not only asserted the value of care and unpaid labour, but also identified how equal rights and recognition of care work could add to traditional economic measures, like the budget balance and GDP.

The incremental expansion of government funding for childcare since the 1970s reflected the campaigning efforts of women’s movements and the mobilisation of women as voters. But over time it also reflected a strategy to frame care in economic terms. For example, childcare could facilitate higher female participation rates in paid work, and later, it would add to human capital formation.

Similar arguments informed policy responses to neoliberalism in Northern Europe. A ‘social investment’ model reimagined social spending on education and care, and assistance with labour market transitions associated with parenting, as investments in a skilled and productive workforce.

Care and the Budget

Fast forward to the October 2022-23 Budget in which the Labor government has committed to some new social spending despite the pressure to demonstrate its ‘fiscal restraint’. Childcare funding will increase and paid parental leave will also expand. Both come with time delays, but they will be legislated and are in the forward estimates.

These modest commitments reflect long-running campaigns that seek to value care. But in his speech, Jim Chalmers made it clear this was about ‘more than care’. Childcare produced an ‘economic dividend’ and parental leave was ‘about participation and productivity – and that’s what makes it economic reform’. The Treasurer also emphasised that these measures would (eventually) provide cost-of-living relief, but there was no mention of ‘rights’ and little celebration of care as a value.

Framing care as good public finance clearly has some political purchase, but it also excludes many. The wellbeing budget reflects similar tensions between extending our gaze beyond profit and GDP, while resisting efforts to reduce everything to numbers.

Wellbeing and income security

One of the notable exceptions to the October Budget was any increase in Australia’s direct cash payments to relieve poverty, especially the Jobseeker payment. Despite evidence that higher payments through the COVID pandemic recession lifted thousands out of poverty, and a consensus that current payments are too low, nothing was done.

Expanding direct cash assistance for income security has, however, received growing support from economists, and is linked closely to efforts to quantify wellbeing. International interest in Basic Income has seen an explosion of trials and pilots, increasingly tied to measuring wellbeing, as well traditional economic impacts.

The 2017-18 Finnish Basic Income experiment attracted global attention but did not lead to permanent implementation of the policy. The trial relied on a precarious political coalition and was also criticised for its narrow focus on the unemployed. But Lisa Adkins and Hanna Ylöstalo argue the trial ‘should be understood as a behavioural intervention designed to enhance the wellbeing of unemployed populations at a time when wellbeing is emerging as a value-producing capacity’. Subjective wellbeing indicators showing positive effects of basic income for trial participants were cited as key evidence by proponents of the policy.

Wales enacted a wellbeing budget in 2015. In June 2022, Wales launched a five-year Basic Income pilot specifically targeted at young people leaving institutional care arrangements, due to ‘their greater risk of homelessness and mental health problems’. Scotland, a country committed to a wellbeing framework since 2007, has also explored ‘BI’s potential role in achieving the United Nations’ Sustainable Development Goals (SDGs) of eliminating poverty and achieving good health and wellbeing’, with a particular focus on mental health.

Might the wellbeing budget be a small initial step to more inclusive public finance, potentially opening space for Australia, too, to expand and increase benefits to end poverty? Or is it more likely that Australia’s wellbeing budgeting will be assimilated back into the logic of austerity – expanding social provision only where there is a fiscal case? Changing the way we count is an important first step, but without political will, it may only be window dressing.

 

Ben, Troy and Elise are members of the Australian Basic Income Lab project.