Insights

Capturing the full picture: Why we must look beyond GDP to understand wellbeing

Posted April 12, 2023

Author(s):

Julian Szafraniec

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Australians’ wellbeing is significantly impacted by where they live according to the first edition of the SGS Cities & Regions Wellbeing Index.

In 2022, Australia’s cities and regions experienced substantial disparities across several wellbeing indicators, including affordable housing, equality and stable employment. While certain regions thrive, many regional and inner city areas are being left behind.

The SGS Cities & Regions Wellbeing Index (CRWI) is the first of its kind. The Index clearly measures levels of wellbeing across the cities and regions of Australia. Measuring several wellbeing indicators and Gross Regional Product (GRP), the Index shows how communities are faring across 334 regions, each roughly the size of a local government area. 2022 data shows that the oft-reported GDP growth of many states masks the poor wellbeing across regions. Julian Szafraniec, one of the report's authors says:

GDP measures at the national and state level hide uneven economic progress in specific regions. For example, state-level GDP measures fail to capture the huge gap in economic experiences felt by residents in Cottesloe versus the Wheat Belt or Pilbara, or Gold Coast versus Mt Isa. Choosing where to live involves trade-offs. Living in areas with good job opportunities may mean higher housing costs, or poor housing conditions. Cities offer higher incomes and job opportunities but may lack protected environmental areas and work-life balance.
— Julian Szafraniec, SGS Principal and Partner

The CRWI combines data across seven wellbeing domains, including health and equality, to provide a clearer picture of Australia’s regions. Clear wellbeing disparities in regional and rural areas suggest a lack of access to crucial services compared to metropolitan regions.

The report demonstrates that wellbeing is more than just economic growth. Communities’ needs are complex and need to be addressed accordingly. Policymakers can use the CRWI to tailor targeted support for the regions that need it the most. As report author Julian Szafraniec puts it:

The power of the Index is as a tool to improve policy and investment decisions by focusing beyond jobs and growth towards making lives better. It can help everyone understand local communities and economies, making it a valuable starting point for federal, state and local strategies, which far too often focus on broad brush or silver bullet solutions.
— Julian Szafraniec, SGS Principal and Partner

By spatially grounding economic and wellbeing data, the report highlights the complexities of the Australian socio-economic landscape. The report shows that while many capital cities had higher levels of wellbeing overall, many regional areas experienced similar if not higher levels of wellbeing than certain capital cities when it came to metrics of housing, equality and environment.

The CRWI dispels broad generalisations about the state of the economy. Few generalisations can be made from the report, except one: regions are complex and diverse. To improve the lives of the communities living in them, policy needs to consider more than just GDP.