Gap keeps on growing

Conventional wisdom is that governments change when economic conditions turn sour. When economic conditions are good, governments are often forgiven for various misdemeanours and unpopular decisions.
So with a decade or more of uninterrupted economic growth why have the polls turned against the Howard government?

It may have something to do with whether most people are really better off as a result of these good economic circumstances.
Opinions differ on what is important for a better quality of life. However, economic growth as measured by Gross Domestic Product (GDP) is a poor measure of progress. Even the inventor of GDP, Simon Kuznets, warned that we must focus on the quality of growth, not just the quantity.

The bizarre nature of GDP is easily demonstrated. More accidents or natural disasters will result in more growth. People working longer hours and spending less time with their family will produce more growth. Buying things we don’t need will produce more growth. But none of these things enhances our quality of life.
While GDP measures income, it does not measure costs. In particular, it does not measure the environmental degradation of the land, waters and atmosphere. It also does not measure social costs such as family breakdown, crime and social dislocation.
GDP also does not measure the distribution of national income across the population. Australia now ranks below Canada and most European countries according to the Gini Index of income inequality.

This inequality can be seen in the significant disparity between the public and private health and education systems. The “fair go” Australia has unfortunately been replaced by a country of haves and have-nots. And to our great shame, indigenous Australians are mostly in the have-not category.
The Australian Bureau of Statistics produces a suite of figures to measure our progress but they fail to recognise the disparities that exist in our supposedly egalitarian society.

The Redefining Progress Institute in the USA has proposed the use of a Genuine Progress Indicator (GPI) that would bring together a variety of measures of progress into a single number that would allow us to see whether we really are making progress.
Perhaps unsurprisingly, according to the GPI, both the United States and Britain have gone backwards since the 1980s. Despite Australia’s GDP almost doubling since 1985, the GPI shows that we have made only marginal genuine progress up to 2000 but we seem to have been going backwards since.

This was originally published in the Fraser Coast Chronicle on 24 July 2007.