In the Government’s recent Well-being framework, “Measuring What Matters“, the Treasury rightly took issue with the use of GDP to measure prosperity and well-being. As the old line by Robert F Kennedy goes, GDP “measures everything in short, except that which makes life worthwhile”.

Instead, the government has proposed using “Real Net National Disposable Income (RNNDI) per capita” to measure prosperity, arguing that  it “broadly captures living standards by measuring the amount of real income per person earned domestically and overseas”. While we have issues with the use of this measure given it has a tendency to downplay the living standards of households, we will at least judge the government by their own standard.

And the standard is not good.

In the past year RNNDI per capita hell by 2.1% – well beyond the 0.3% fall of GDP per capita. It is the 10th biggest annual fall in the past 30 years. Only during the pandemic, the GFC and a couple quarters in 2015 have seen worse falls.

The June quarter fall of 2.1% is the 10th biggest fall on record – going back 50 years to 1973.

If the government wants to be serious about well-being then it should acknowledge by its own measure, well-being has just fallen through the floor.