Page 123 - Week 01 - Wednesday, 14 December 2016
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are homeless. That is not good enough. We have the second-highest rate of homelessness of any Australian jurisdiction, and 10 per cent of Canberra households are apparently living in poverty. That is something where we should be able to do better.
I talked a bit about the GDP. One of the things about the GDP is that academic studies have been done. Specifically, being a Canberran, I will reference studies done at the Crawford school at ANU. Dr Ida Kubiszewski, who is a senior lecturer there, did a study comparing an indicator called the genuine progress indicator, a relatively broad indicator which looks at environmental and social factors as well as economics, to GDP and a range of other indicators for 17 countries. She found that since 1978 GDP has increased significantly. We all knew that. But GPI has flatlined and has not increased significantly.
Dr Kubiszewski’s studies further found that the global economy has tripled since 1950, but global human wellbeing as estimated by the GPI has been flat or decreasing since around 1978. I must stress that I am talking globally here, not just about the ACT, because we simply do not have these figures for the ACT or even for Australia. Dr Kubiszewski says:
Since 1978 we have been in a period of “uneconomic growth” where the GDP measure of the economy is growing, but social well-being is not.
Dr Kubiszewski says, interestingly, that GDP and the GPI began to grow in different directions when global per capita earnings hit $US6,500 per year. After that the GDP kept on going up but the general progress indicator levelled off or, in some places, decreased. Interestingly she says that 1978, which is when the divergence happened, is around the time that the human ecological footprint, which is what I was talking about earlier when I mentioned global hectares, exceeded the earth’s capacity to support life on it. Other global indicators such as life satisfaction also began to level off around that time.
GDP was never created as an indicator of social wellbeing or social harmony. It was an indicator that economists put together to try and compare the economic activity from one year to the next. There were well-known issues with this in terms of externalities, pollution, using up capital, using up our natural resources. None of that is taken into account in the GDP. I am not suggesting that GPI is the answer to all questions, but we need better indicators.
One reason I would say that we really need better indicators is this. I would reference, as I did last night, two recent international elections, the referendum on Brexit and the US election. In both cases we had the overwhelming economic advice from the establishment that those particular choices were not going to lead to better economic outcomes for the people of the UK or the US. But it is pretty clear from the commentary that the people of the UK and the US, or a number of them, saw their economic circumstances quite differently from the measures of GDP. They have been going up—maybe not as strongly as people would like, but they had been going up in both of these economies—but considerable numbers of people thought that their world was not getting better, that the world they lived in was not getting better despite
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