Wellbeing Makes Economic Sense

Why Wellbeing Makes Economic Sense

Having been part of the evolving wellbeing conversation for years, it’s disappointing to see national leaders still questioning whether wellbeing makes economic sense. This ongoing skepticism only serves to undermine progress in understanding the critical role wellbeing plays in societal and economic development.

Misguided Political Narratives

This week, a prominent political leader dismissed the concept of a wellbeing budget during a parliamentary session, 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 even suggested that parliament would transform into a “barefoot, robes flowing, incense burning chamber… gone are the seats, gone are the benches, and in their place meditation mats for all.”

While these comments were intended to ridicule, the idea of a more mindful parliament doesn’t sound half bad. But this rhetoric highlights a troubling misunderstanding of what wellbeing means and why it’s essential for governments and corporations to recognize the return on investment in wellbeing initiatives.

What Is a Wellbeing Budget?

A wellbeing budget, like New Zealand’s, approaches policy initiatives as investments. It focuses on advancing priorities that improve collective wellbeing, such as mental health programs, poverty reduction, and sustainability. These initiatives don’t just enhance quality of life; they also boost national productivity.

The Cost of Ignoring Mental Wellbeing

Mental health is a crucial component of overall wellbeing. Despite political resistance, there’s been significant progress in prioritizing and investing in wellbeing over the past decade. Evidence shows that building mental wellbeing as a preventative measure reduces the prevalence and impact of mental ill-health, which strengthens the economy rather than detracts from it.

The numbers are compelling:

• According to the Productivity Commission’s draft report on mental health (2019), the cost of mental ill-health and suicide to the Australian economy is conservatively estimated at $43 to $51 billion annually.
• An additional $130 billion is linked to diminished health and reduced life expectancy for those living with mental ill-health.

Ignoring these figures comes at an enormous cost, not just economically but also socially.

The Role of Governments and Businesses

Various factors influence mental health, including biological, psychological, and social determinants. Governments and businesses must implement policies to address these challenges. For example, ensuring access to housing and employment opportunities is critical. Equally important is investing in capacity-building initiatives that foster improved mental health, not just treating illness.

Work plays a significant role in enhancing an individual’s sense of purpose and contribution to society. In Australia, nearly 13 million people are employed, many within small businesses. These organizations can act as catalysts for employee wellbeing by prioritizing mental health and equipping employees with tools to enhance their resilience. The benefits extend beyond the workplace to families and communities.

The Economic Return on Wellbeing Investment

The economic case for investing in wellbeing is strong:

• Every dollar invested in mental health initiatives yields a return of approximately $2.30.
• Resilience training programs specifically result in measurable benefits, including a 1-day reduction in absenteeism per employee ($188 on a base salary) and $1,769 savings per full-time employee from reduced presenteeism and improved productivity.

Wellbeing and Workforce Longevity

As global demographics shift, the need for wellbeing investments becomes even more urgent. For the first time in history, the number of people aged over 65 outnumbers those under five. In Australia, the working-age population is shrinking, particularly in regions like South Australia. With people expected to work longer, maintaining their wellbeing is crucial to extending workforce participation.

Low wellbeing is a key factor in premature workforce exits. Addressing this through strategies that support mental, physical, and social health will help retain the skills and talent needed for a productive future.

A Clear Choice

The evidence is clear: investing in wellbeing isn’t a luxury—it’s a necessity. It enhances individual and collective quality of life while delivering significant economic benefits. Wellbeing makes good economic sense, plain and simple.