In the report released on Saturday, the authors have compared changes in key indicators during Labor’s last term between 2007 and 2013 to the Coalition’s term which has lasted a similar period.
The index’s indicator on health shows it has been a drag on wellbeing every year of the past two governments, although the negative effects were less pronounced during Labor’s period.
Obesity has been a growing cost to wellbeing during the past 15 years. The index shows the rate of obesity has risen at a slightly higher rate during the Coalition’s tenure than it did under Labor.
Mental illness has also been a big drag for more than decade.
In contrast, the index’s indicator on knowhow (called human capital accumulation by economists) has contributed strongly to our wellbeing. Although, its rate of growth has been a bit weaker during the Coalition’s term than it was under Labor.
One reason for that is a modest slowdown in the rate at which adults have acquired post-school qualifications since 2017. Another factor was a drop in the year 12 retention rate in 2018.
However, some components have performed stronger during the Coalition’s tenure including the equality of income distribution. Income inequality has been a drag on wellbeing under both governments but the report says the impact has been slightly smaller since the Coalition came to office in 2013.
Employment-related indicators have also performed better during the Coalition’s term. A decline in the number of people experiencing long-term unemployment since 2015 has been positive for national wellbeing under the current government.
During Labor’s last period in office wellbeing was boosted by a period of strong growth in income. But that was driven by favourable commodity prices during the mining boom rather than policies.
The report found that during both the last Labor government and the Coalition’s latest period in office GDP increased at an average annual rate of 2.6 per cent, meaning the economy grew faster than community wellbeing under both governments.
Economic management has been a central theme of political debate ahead of next Saturday’s election.
But the report’s author, economist Nicholas Gruen, said decisions by the Reserve Bank may have contributed more to the differences in wellbeing growth than policy choices made by governments over the past 12 years.
“Though we like to hold the government responsible for the economy, I’d sheet more responsibility through to the Reserve Bank which, after a fairly impressive performance during the financial crisis has retreated into timidity in tackling the sluggish economy cutting the cash rate in small increments sporadically and reluctantly,” he said.
“GDP growth has been lower than it should have been – to a substantial extent because of the RBA’s decision to follow its own improvised conservatism when the economic textbook and their inflation target told them to cut more aggressively.”
Growth in national wellbeing was especially weak last year — the index rose by 0.3 per cent in the 2018, the lowest in a calendar year since 2015 and well below the average annual growth of 2.3 per cent since the index began in 2005.
Matt Wade is a senior writer at The Sydney Morning Herald.