Like governments, the economy should serve the people

Just two years after proving a big electoral asset and delivering a substantial election victory for the Tories, Johnson's own colleagues have judged him to be an electoral liability, in part because he misled the public over what he knew about allegations of sexual misconduct against a member of his government. But also due to a series of self-inflicted scandals. It is interesting to see issues of integrity playing out in UK politics so soon after our own "integrity election".

While our own integrity debate has focused on the need to establish a national corruption watchdog, there are many other ways the Albanese government can help restore integrity and strengthen Australia's democracy. The decision of Attorney-General Mark Dreyfus to drop the prosecution of Bernard Collaery is the right one. The politically-motivated prosecutions of Witness K and his lawyer Bernard Collaery should never have happened. They were designed to silence whistleblowers who embarrassed the government. By revealing that the Howard government oversaw the bugging of cabinet discussions of Timor-Leste - to effectively rob our impoverished ally - Witness K and his lawyer Collaery performed a public service. They deserve our thanks.

Like governments, the economy should serve the people. There's no doubt the Australian economy is facing some challenging conditions: rising inflation and interest rates, cost of living pressures and climate change-fuelled floods and extreme weather. But it is encouraging to see the Albanese government is as concerned about the shape of the economy as the size of it.

It is an important distinction; economic growth is not an end in itself. GDP simply measures economic activity, not economic progress. Let's not forget BHP once claimed that an oil spill in the Great Australian Bight would be good for the economy because "in most instances, the increased activity associated with clean up operations will be a welcome boost to local economies". GDP does not measure the anguish of watching your home flood for the fourth time in six months, or the despair of having to sleep in a tent with your child because there's no housing available.

Former US senator Bobby Kennedy once observed that GDP "does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures ... everything, in short, except that which makes life worthwhile".

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Similarly, when ABC's 7.30 asked Professor Joseph Stiglitz, Nobel Laureate and former chief economist of the World Bank if he had any advice for a young new treasurer, he observed "The economy should serve the people, not people the economy. We sometimes get that confused".

As it happens, Treasurer Jim Chalmers is in perfect agreement with Professor Stiglitz, who is currently touring Australia as a guest of the Australia Institute. Yesterday, Chalmers announced that the health and wellbeing of Australians will be part of measuring the success of the economy in his first budget in October, alongside the usual indicators like GDP growth and debt. It's an idea Chalmers has been pushing for a long time, addressing the Australia Institute about the importance of 'measuring what matters' back in February 2020 and one several governments, including New Zealand, already have in place.

Chalmers has been at pains to point out that the amount of debt or public spending is not inherently good or bad, the quality of the spend is just as important - in other words, the shape is just as important as the size. Chalmers also talks about the importance of making sure policies are geared towards achieving multiple objectives at once. For example, boosting access to affordable childcare and early childhood education will not only ensure Australia's children can access high quality education, but it will lift women's participation in the workforce too. While Labor's policy of Rewiring Australia to accelerate the transition to 100 per cent renewables will have some significant short-term capital costs, long-term we know it will reduce emissions, free us from dependence on expensive gas and coal, and put downwards pressure on electricity prices.

Just as policies designed to deliver lasting, long-term benefits to society pay off in multiple ways, poor spending decisions and wasted debt are costly in multiple ways. The $11 billion that federal and state governments spend subsidising the fossil fuel industry each year is money that can't be spent on public services, but it is also making climate change worse, fuelling the more frequent and intense extreme weather events Australia is already experiencing.

There's been chatter recently about whether we need spending cuts, but this is only one half of the budget conversation. It's time for an honest national conversation about revenue. Sure, there is fat and waste to be trimmed, but government is bigger now by bipartisan agreement.

Whether it is Opposition Leader Peter Dutton wanting increased defence spending, or the Labor government wanting to fix our neglected aged care sector and fully fund the NDIS, big government is here to stay. Public spending is not going to decline any time soon. We have almost a trillion dollars in debt and $180 billion in income tax cuts for the wealthy coming down the pipeline to permanently damage our revenue base and weaken our progressive income tax system.

As Einstein said, not everything that counts can be counted, but for too long we've solely focused on 'economic growth'. It's time to talk about how the economy supports a healthy society, not just a healthy balance sheet.