Measuring What Matters – Beyond GDP
Economic growth is an important measure of living standards, but a broader range of measures provides a richer perspective on wellbeing.
A lot of the work economists do is geared towards measuring the state of the economy and its progress towards a more prosperous society. A key economic measure - GDP per person - has long been used to assess what we loosely call ‘living standards’. If GDP per person is increasing, then things are getting better - but are they?
The truth is that a single economic measure like GDP can’t incorporate the full extent of wellbeing and progress. We know that income (GDP) is highly correlated with key wellbeing measures such as life expectancy and education, particularly in developing economies, but more is needed to fully understand and measure how we, as a society, are faring.
The Australian government’s Measuring What Matters Framework reports across five wellbeing themes, which are supported by 50 key indicators to monitor and track progress. The themes are:
- Healthy: A society in which people feel well and are in good physical and mental health, can access services when they need, and have the information required to take action to improve their health.
- Secure: A society where people live peacefully, feel safe, have financial security and access to housing.
- Sustainable: A society that sustainably uses natural and financial resources, protects and repairs the environment and builds resilience to combat challenges.
- Cohesive: A society that supports connections with family, friends and the community, values diversity, and promotes belonging and culture.
- Prosperous: A society that has a dynamic, strong economy, invests in people’s skills and education, and provides broad opportunities for employment and well-paid, secure jobs.
Inclusion, equity and fairness are cross-cutting dimensions of the Framework.
The Framework is released annually by the ABS with the most recent update released last week, with the following key findings:
- Healthy: Australians are living longer, yet the prevalence of chronic conditions continues to rise and access to healthcare is becoming increasingly challenging. In 2022, half of Australians reported having at least one chronic condition, up from 42% a decade earlier. Additionally, growing demand for health services has also led to longer waits, with 28% of Australians in 2023-24 waiting longer than felt acceptable for a GP appointment, compared with 23% ten years ago.
- Secure: Australians are increasingly concerned about world events and are feeling less safe as a result. The proportion of adults who feel safe or very safe in light of world events has fallen drastically from 91% in 2005 to 51% in 2025.
- Sustainable: More needs to be done to protect Australia’s environment. While Australia’s net greenhouse gas emissions have trended downwards over the past 20 years, they have remained flat since 2020 and are only 27% below emissions in 2005 – some way from the new target of a reduction of 62-70% by 2035. Biodiversity is also in trouble. From 1985 to 2021, the relative abundance of observed threatened and near-threatened species declined by 73%. However, environmental policies may now be having a positive impact, with the most recent year showing a small improvement of 2.6%.
- Cohesive: Some measures of social cohesion are worsening over time. Australians report a declining sense of belonging and national pride, falling steadily since it was first measured in 2007 and hitting a record low in 2024. At the same time, ‘Acceptance of diversity’ dropped in 2024, with 71% of people agreeing that “accepting immigrants from many different countries makes Australia stronger”, compared with 78% in 2023. On a positive note, this measure has improved since 2018 when it was 63%.
- Prosperous: The average Australian worker is earning more, with real net national disposable income rising from $56,000 in 2003-04 to $74,700 in 2023-24. However, the way earnings are distributed has become less equal. Australia’s Gini coefficient of income – a measure of income inequality between 0 and 1 where a lower coefficient represents a more equal distribution – rose from 0.29 in 2003-04 to 0.31 in 2022-23.
This data release reveals that Australia is slipping on key measures of wellbeing, particularly across social indicators. This is despite government spending rising strongly across health care and social assistance. This is another dimension of Australia’s productivity crisis - a stagnation in delivering social outcomes despite additional resources being provided.
This newsletter was distributed on 25th September 2025. For any questions/comments on this week's newsletter, please contact our authors:
This blog was co-authored by Jennifer Storer, Director & Daniel Kelly, Economist at Deloitte Access Economics.
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