By Andrew Johnstone-Burt - November 25, 2014
The G20 provides a valuable opportunity for leaders to discuss a wide range of global economic issues and to use their collective power to make a difference. The G20’s immediate task is breaking the cycle of low growth, including diminished business and consumer confidence.
A common observation we have is that governments are at, or close to, the limits of macroeconomic policy responses. We observe now there exists a challenge for governments they need to think beyond the usual macroeconomic levers to support social progress. I believe growth on its own without social progress is an empty goal.
In the past we have seen that traditional approaches to solving society’s most complex and challenging social problems have are not been sustainable. These complex problems take time to come to fruition, therefore we need to apply fresh thinking and to act with a sense of urgency.
There is a growing recognition of the need to measure progress over and above GDP to understand the sustained impact of any growth strategies. A more holistic framework of progress measures is needed. Deloitte is working with the Social Progress Imperative, a non–profit which is driving the global debate on measuring what matters most to advance progress through their Social Progress Index (SPI). Designed to complement GDP, and other economic indicators, this new index measures a country’s social and environmental strengths and weaknesses to help prioritise investment decisions.
By examining the SPI indicators and comparing G20 countries we demonstrate the ways in which the SPI can be used to unlock opportunities for true growth in Australia and examples of how these opportunities could be solved through the solution economy. Of the 40 G20 countries the Netherlands, Sweden and Canada ranked the highest in terms of social progress, among G20 countries Australia ranked 6th on the SPI.
Australia’s key social challenges identified through the SPI, when compared to other G20 countries including:
- Affordable housing: in Australia housing affordability has continued to decline. 862,000 lower income households were experiencing housing stress, comprising 15.8 per cent of all Australian households and 28.2 per cent of low income households in 2002–035. In addition 105,237 people in Australia were homelessness in 2011.
- Adult literacy: even though Australia does well on the high level measure, there are problematic trends below the surface. In 2011–12 around 3.7% (620,000) of Australians aged 15 to 74 years had literacy skills estimated at below Level 1, with a further 10% (1.7 million) at Level 1 and 30% (5.0 million) at Level 2 (noting that the assessment scale ranges between below Level 1 – the lowest rating – and Level 5).
- Obesity: the growing trend in overweight and obesity is reflected in Australia. Between 2007–08 and 2011–12, the rate of adult overweight and obesity significantly increased nationally to nearly two thirds (from 61.1% to 63.2%). Children are also affected with a quarter (25.3%) of children (aged 5–17 years) being overweight or obese in 2011–12, (17.7% overweight and 7.6% obese).
I am excited to deliver some good news: governments, non-government organisations, individual investors and the private sector have been moving towards the solution economy. This will provide new ideas and solutions to social problems, improved communication and collaboration to break down historical silos and unlock true growth. There is a real opportunity to bring new approaches and perspectives to solving society’s most complex challenges, to take an outcomes based focus and collaborate to deliver improved outcomes. If we are to realise the benefit of solving these issues we need to act swiftly and united.
Andrew Johnstone-Burt is the national leader of Deloitte Australia's public sector group. He has a range of specialist skills across policy reform and fiscal sustainability in the public sector in Australia, United Kingdom, and Europe. Along with 10 years’ military service, Andrew has more than 20 years’ advisory experience in strategy, people, change and ICT. He is regarded as a trusted adviser for a number of Australian federal and state government departments.