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Wellbeing makes economic sense

Having been part of the evolving wellbeing conversation for a number of years now, I find it very disappointing that we are still hearing the nation’s leaders question whether wellbeing makes economic sense.

A prominent political leader came out this week in parliament saying “… (the opposition’s) wellbeing budget doesn’t need to measure GDP, doesn’t need to measure unemployment, doesn’t need to deliver lower taxes & balanced budgets. So, what are you going to get from his wellbeing budget? Double the hugs & triple the taxes!” He went on to say that parliament would be transformed into a “barefoot, robes flowing, incense burning chamber…. gone are the seats, gone are the benches, and in their place meditation mats for all.”

I, for one, can think of worse things than a parliament that meditates more often. (Disclaimer, this is not an attack on the current government, but an example of where the public discourse at the political level needs to evolve).

This is the type of narrative that results in the misunderstanding of what wellbeing means, why it’s important, and why governments and corporations need to understand the return on investment and the costs and impact of inaction.

A wellbeing budget, as implemented in New Zealand for example, focusses on policy initiatives as investments. It is about seeing spending as a way to advance priorities that positively impact the collective wellbeing of people, for instance initiatives that improve mental health, reduce poverty and support sustainability and in turn also have a positive impact on the productivity of the nation.

Mental Health is one aspect of wellbeing. Despite the inaccurate political discourse mentioned above, we have largely seen a positive shift towards prioritising and investing in wellbeing and mental health initiatives over the past decade. There is a large body of evidence that building mental wellbeing, as a preventative measure to reduce the prevalence and impact of mental ill-health, is not counter-productive to a strong economy, but rather an essential component.

We know from recent data published in the Productivity Commission’s draft report on mental health in Oct 2019, that the cost to the Australian economy of mental ill-health and suicide is, conservatively, in the order of $43 to $51 billion per year. Additional to this is an approximate $130 billion cost associated with diminished health and reduced life expectancy for those living with mental ill-health.

There are many aspects that impact an individual’s mental health status, including biological, psychological and social determinants, the resources we each have and the challenges we each face. Governments and businesses have a role to play in implementing policies that assist with the provision of housing and employment opportunities for example. There is also a strong case for investing directly in capacity building for improved mental health, not just treatment of illness.

Work is one aspect of life that can enhance a person’s sense of purpose, meaning and contribution to society. In Australia there are close to 13 million people in employment. A large number are self-employed or employed within a small business, but businesses have a key role to play as enablers for employee wellbeing by providing an environment where mental health is prioritised and people are equipped with skills to build their mental health, with flow on benefits to their families and communities.

We know that for every dollar invested in a mental health initiative there is a gain of approx. $2.30. Specifically, for resilience training initiatives the gain is approx. 1-day reduction in absenteeism per employee ($188 on a base salary) plus $1,769 savings per FTE from reduced presenteeism/improvement in productivity.

Another lens with respect to the importance of investing in wellbeing at the government and business level, is the expectation that we will work for longer. Last year the world reached peak youth, meaning for the first time the number of people aged over 65 outnumbered the number of people aged under 5. The working age population is decreasing, particularly in South Australia. If we require people to work for longer then we also need to provide people the capacity to do so. Low wellbeing is cited as a key reason for exiting the workforce prematurely. This can be addressed through investment in strategies that support all aspects of wellbeing (mental, physical and social) as a key lever to extending working life and retaining the skills and talent we need for a productive future.

Wellbeing makes good economic sense, it’s that simple!

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