Challenge to arrest our slide down the

Nation’s standards are slipping in the economy, security and environment, writes Jan Davis

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prosperity is more than just material wealth. Prosperity is created by both economic and social wellbeing working together. In a prosperous country, citizens have good health, access to quality education, strong and safe communities, and opportunities to start a business or pursue a career.

According to a report late last year, Australia has “strong foundations to face the future,” but faces “significant challenges” in maintaining prosperity.

The Quest for Prosperity — Shaping Australia’s Future is from Chartered Accountants Australia and New Zealand and the Legatum Institute.

It analyses prosperity in 34 countries over the past decade based on economic quality, business environment, governance, education, health, safety and security, personal freedom, social capital and natural environment.

The report found Australia now ranks sixth in world prosperity rankings, down from second in 2007. We placed strongly across a range of areas, including second in the world for social capital, fourth for education, and eighth for health.

However, there has been a decline since 2007 — and we are sliding down the rankings in the economy, the natural environment and security.

While Australia has been performing well overall, the research shows there is room for improvement to ensure prosperity for all. This is because prosperity is much more than a financial measurement — it’s a vital indicator of a nation’s health in terms of economy, society, industry and the environment.

The report shows Australia is a world leader in social capital — the strength of personal relationships, support networks and civic participation. We’ve seen a sharp rise when it comes to the health ranking — because of investments in infrastructure and care services.

The paper also identifies areas where Australia has fallen behind, particularly in economy, trade and competition. In terms of the economy, Australia has declined because of trade barriers that have the potential to slow foreign direct investment, and antimonopoly policy that can inhibit domestic competition.

Australia has declined in safety and security because we’ve remained static — while other countries have implemented initiatives that have lowered road death tolls and reduced crime. The drop in our environmental rankings is said to be due to excessive exploitation of natural resources in the last decade.

Clearly, Australia does very well on the world stage, and our overall prosperity means we have strong foundations to face the future. Nevertheless, we face significant challenges.

We are one of only a few highly ranked countries to see prosperity decrease since 2007. There are challenges to keeping our prosperity growing, including an increasingly closed economy, loss of confidence in

institutions, lack of economic opportunities for some of Australia’s most vulnerable citizens, and threats to the environment.

More can be done to remove trade barriers. Improving economic performance also requires diversifying exports and looking to export more high value products and services.

While Australia has a very strong education system, we need to do more to improve literacy and numeracy. STEM skills are important, as are highly adaptive skills that will prepare Australians for the constantly changing work environment.

Governments and businesses need to do more to promote innovation: for example, through better collaboration between businesses and universities. Improving trust in political institutions is a big challenge. There are a number of things that can be done to improve this, in particular increasing the transparency of government decision-making. This will enhance citizens’ interactions with government and allow us to be better able to hold politicians to account.

A number of Australians are not sharing in the nation’s prosperity. Poor education outcomes for the most disadvantaged need to be addressed, especially in Tasmania. More can be done for the indigenous population. Finally, there are increasing environmental pressures. Economic growth and future population growth needs to occur in a way that does not further degrade the environment. This is possible, but requires innovation and new approaches.

This report has identified the main drivers of Australian prosperity. It has shown the areas of strong performance and suggested ways to keep improving. It has also charted the significant challenges to a prosperous future.

Securing future wellbeing for all Australians will require bold and courageous action. Hopefully, those tasked with improving our shared prosperity are prepared to step up to the plate.

Jan Davis is an agribusiness consultant based in Tasmania and a former chief executive of the Tasmanian Farmers and Graziers Association.