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Australia performs exceptionally well in measures of well-being, as shown by the fact that it ranks among the top countries in a large number of topics in the Better Life Index.
Money, while it cannot buy happiness, is an important means to achieving higher living standards. In Australia, the average household net-adjusted disposable income is 28 884 USD a year, more than the OECD average of 23 047 USD a year. But there is a considerable gap between the richest and poorest – the top 20% of the population earn six times as much as the bottom 20%.
In terms of employment, over 73% of people aged 15 to 64 in Australia have a paid job, above the OECD employment average of 66%. Some 79% of men are in paid work, compared with 67% of women. People in Australia work 1 693 hours a year, less than most people in the OECD who work 1 776 hours. Almost 14% of employees work very long hours, much higher than the OECD average of 9%, with 21% of men working very long hours compared with just 6% for women.
Having a good education is an important requisite for finding a job. In Australia, 73% of adults aged 25-64 have earned the equivalent of a high-school degree, close to the OECD average of 74%. This is truer of men than women, as 76% of men have successfully completed high-school compared with 71% of women. This difference is higher than the OECD average and suggests women’s participation in higher education could be strengthened. Australia is nonetheless a top-performing country in terms of the quality of its educational system. The average student scored 519 in reading literacy, maths and science in the OECD’s Programme for International Student Assessment (PISA). This score is higher than the OECD average of 497, making Australia one of the strongest OECD countries in students’ skills. On average in Australia, girls outperformed boys by 9 points, in line with the average OECD gap.
In terms of health, life expectancy at birth in Australia is almost 82 years, two years higher than the OECD average of 80 years. Life expectancy for women is 84 years, compared with 80 for men. The level of atmospheric PM10 – tiny air pollutant particles small enough to enter and cause damage to the lungs – is 14 micrograms per cubic meter, considerably lower than the OECD average of 21 micrograms per cubic meter. Australia also does well in terms of water quality, as 91% of people say they are satisfied with the quality of their water, higher than the OECD average of 84%.
Concerning the public sphere, there is a strong sense of community and high levels of civic participation in Australia, where 94% of people believe that they know someone they could rely on in time of need, higher than the OECD average of 90%. Voter turnout, a measure of public trust in government and of citizens’ participation in the political process, was 93% during recent elections; this figure is the highest in the OECD where the average is 72%. There is little difference in voting levels across society; voter turnout for the top 20% of the population is 94% and for the bottom 20% it is 92%, a much narrower difference than the OECD average gap of 12 percentage points and suggesting there is broad social inclusion in Australia’s democratic institutions
In general, Australians are more satisfied with their lives than the OECD average, with 84% of people saying they have more positive experiences in an average day (feelings of rest, pride in accomplishment, enjoyment, etc) than negative ones (pain, worry, sadness, boredom, etc). This figure is higher than the OECD average of 80%.
OECD in Action
OECD Economic Surveys: Australia 2012
OECD's periodic review of the Australian economy examines recent economic developments, policies and prospects. Special chapters cover strengthening adjustment capacity and productivity performance.Read this report
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Australia in Detail
Housing – Australia expand
Living in satisfactory housing conditions is one of the most important aspects of people’s lives. Housing is essential to meet basic needs, such as shelter, but it is not just a question of four walls and a roof. Housing should offer a place to sleep and rest where people feel safe and have privacy and personal space; somewhere they can raise a family. All of these elements help make a house a home. And of course there is the question whether people can afford adequate housing.
Housing costs take up a large share of the household budget and represent the largest single expenditure for many individuals and families, by the time you add up elements such as rent, gas, electricity, water, furniture or repairs. In Australia, households on average spend 19% of their gross adjusted disposable income on keeping a roof over their heads, slightlybelow the OECD average of 21%.
In addition to housing costs it is also important to examine levels of satisfaction with living conditions, such as the average number of rooms shared per person and whether households have access to basic facilities such as indoor flushing toilets. In Australia, 90% of people say they are satisfied with their current housing situation, more than the OECD average of 87%.
More ResourcesHow's Life? at a Glance
Income – Australia expand
While money may not buy happiness, it is an important means to achieving higher living standards and thus greater well-being. Higher economic wealth may also improve access to quality education, healthcare and housing.
Household net-adjusted disposable income is the amount of money that a household earns each year after tax. It represents the money available to a household for spending on goods or services. In Australia, the average household net-adjusted disposable income is 28 884 USD a year, higher than the OECD average of 23 047 USD.
Household financial wealth is the total value of a household’s financial worth. In Australia, the average household net financial wealth is estimated at 32 178 USD, lower than the OECD average of 40 516 USD. While the ideal measure of household wealth should include real assets (e.g. land and dwellings), such information is currently available for only a small number of OECD countries.
Despite a general increase in living standards across OECD countries over the past fifteen years, not all people have benefited from this to the same extent. In Australia, the average net adjusted disposable income of the top 20% of the population is an estimated 58 409 USD a year, whereas the bottom 20% live on an estimated 10 323 USD a year.
More ResourcesHow's Life? at a Glance
Jobs – Australia expand
Having a job brings many important benefits, including: providing a source of income, improving social inclusion, fulfilling one’s own aspirations, building self-esteem and developing skills and competencies. In Australia, close to 73% of the working-age population aged 15 to 64 has a paid job. This figure is much higher than the OECD employment average of 66%. Employment rates are generally higher for individuals with a higher level of education; in Australia an estimated 84% of individuals with at least a tertiary education have a paid job, compared with an estimated 59% for those without an upper secondary education. This 25 percentage point difference is smaller than the OECD average of 37 percentage points and suggests the job market in Australia is relatively inclusive.
Women are still less likely than men to participate in the labour market. In Australia, 67% of women have jobs. This is more than the OECD average of 60% but less than the 79% employment rate of men in Australia. This 12 percentage point gender difference is close to the OECD average difference and suggests Australia could further improve employment opportunities for women but has generally been successful in addressing the constraints and barriers women face in accessing work.
Young Australians aged 15-24 face an unemployment rate of 11.3% compared with the OECD average of 16.2%.
Unemployed persons are defined as those who are not currently working but are willing to do so and actively searching for work. Long-term unemployment can have a large negative effect on feelings of well-being and self-worth and result in a loss of skills, further reducing employability. In Australia, the percentage of the labour force that has been unemployed for a year or longer is currently at nearly 1.0%, lower than the OECD average of 3.1%. There is little difference on average between men and women in the OECD area when it comes to long-term unemployment – 3.2% for men and 3.1% for women. In Australia, the long-term unemployment rate for men and women is the same, at 1.0%.
The wages and other monetary benefits that come with employment are an important aspect of job quality. In Australia, people earn 43 908 US dollars per year on average, more than the OECD average of 34 466 USD. Not everyone earns that amount however. Whereas the top 20% of the population earn 55 624 USD per year, the bottom 20% live on 26 074 USD per year.
Another essential factor of employment quality is job security. Employees working on temporary contracts are more vulnerable than workers with an open-ended contract. In Australia just over 12% of total employees have a contract of 6 months or less, slightly higher than an average of 10% in 30 OECD countries. This figure suggests that greater stabilisation of working contracts could be encouraged for Australian employees.
Better Policies for Better Lives
Workplace training provides a strong learning environment and improves the transition from school to work. But training must also be relevant to the workforce development and correspond to the training needs of companies.
The Australian government has developed a specific training initiative: the National Workforce Development Fund. Under this model, funding is provided by both the company and the Australian government. Only nationally accredited training courses are eligible to this kind of funding. They cover a wide range of competency-based programmes and qualifications (over 2 000 courses and nearly 20 000 modules) that support workforce development and business needs.
By supporting accredited training in general or transferable skills, the government is addressing an important market failure, namely a potential lack of incentive for employers to fund this kind of training because another employer might benefit from the investment.
More ResourcesWell‑being in the workplace: Measuring job quality
Community – Australia expand
Humans are social creatures. The frequency of our contact with others and the quality of our personal relationships are thus crucial determinants of our well-being. Helping others can also make you happier. People who volunteer tend to be more satisfied with their lives than those who do not. Time spent volunteering also contributes to a healthy civil society. On average, people in Australia spend 6 minutes per day in volunteering activities, higher than the OECD average of 4 minutes per day. Around 67% reported having helped a stranger in the last month, one of the highest scores in the OECD, where the average is of 48%. These high scores suggest there is a strong sense of community in Australia.
A strong social network, or community, can provide emotional support during both good and bad times as well as provide access to jobs, services and other material opportunities. In Australia, 94% of people believe that they know someone they could rely on in time of need, more than the OECD average of 90%. There is a 3 percentage point difference between men and women, as 92% of men believe they have this kind of social support, compared with 95% of women. While gender has little impact on social network support, there is a relationship between the availability of social support on the one hand, and people’s education level, on the other. In Australia, only 82% of people who have completed primary education report having someone to count on for help in times of need, compared to over 95% for people who attained tertiary education.
A weak social network can result in limited economic opportunities, a lack of contact with others, and eventually, feelings of isolation. Socially isolated individuals face difficulties integrating into society as a contributing member and fulfilling personal aspirations. Social exclusion in Australia is an issue for several groups: those with low incomes, the unemployed, those with poor health and people not proficient in English. Most of these groups also have particular difficulty in “having a say” in their community or influencing decision makers.
More ResourcesHow's Life? at a Glance OECD Insights: Human Capital
Education – Australia expand
A well-educated and well-trained population is essential for a country’s social and economic well-being. Education plays a key role in providing individuals with the knowledge, skills and competences needed to participate effectively in society and in the economy. Most concretely, having a good education greatly improves the likelihood of finding a job and earning enough money. Across OECD countries, 83% of people with university-level degrees have a job, compared with just below 56% for those with only a secondary school diploma. Lifetime earnings also increase with each level of education.
Following a decline in manual labour over previous decades, employers now favour a more educated labour force. High-school graduation rates therefore provide a good indication of whether a country is preparing its students to meet the minimum requirements of the job market. In Australia, 73% of adults aged 25-64 have earned the equivalent of a high-school degree, close to the OECD average of 74%. This is truer of men than women, as 76% of men have successfully completed high-school compared with 71% of women. This 5 percentage point difference is higher than the OECD average of 2 percentage points and suggests women’s participation in higher education could be strengthened. Among younger people – a better indicator of Australia’s future – 85% of 25-34 year-olds have earned the equivalent of a high-school degree, higher than the OECD average of 82%.
Australians can expect to go through 18.5 years of education between the ages of 5 and 39, more than the OECD average of 16.5 years. This high level of education expectancy echoes Australia’s good performance in the educational attainment of its 25-34 year-old population.
But graduation rates, while important, speak little to the quality of education received. The OECD’s Programme for International Student Assessment (PISA) reviews the extent to which students have acquired some of the knowledge and skills that are essential for full participation in modern societies. In 2009, PISA focused on examining students’ reading ability, skills in maths and level in sciences, as research shows that these skills are more reliable predictors of economic and social well-being than the number of years spent in school.
Australia is a top-performing OECD country in reading literacy, maths and sciences with the average student scoring 519 out of 600. This score is higher than the OECD average of 497, making Australia one of the strongest OECD countries in students’ skills. On average in Australia, girls outperformed boys by 9 points, in line with the average OECD gap.
The best-performing school systems manage to provide high-quality education to all students. In Australia, the average difference in results, between the 20% with the highest socio-economic background and the 20% with the lowest socio-economic background is of 98 points, slightly lower than the OECD average of 99 points. Although Australia’s education system fares well internationally, children from disadvantaged groups generally participate less in the important early childhood programmes and have lower test scores. Students from low socio-economic backgrounds have much lower high school completion rates and are around three times less likely to go to university than those from higher socio-economic areas.
More ResourcesHow's Life? at a Glance
Environment – Australia expand
The quality of our local living environment has a direct impact on our health and well-being. Outdoor air pollution is one important environmental issue that directly affects the quality of peoples’ lives. Despite national and international interventions and decreases in major pollutant emissions, the health impacts of urban air pollution continue to worsen, with air pollution set to become the top environmental cause of premature mortality globally by 2050. Air pollution in urban centres, often caused by transport and the use of small-scale burning of wood or coal, is linked to a range of health problems, from minor eye irritation to upper respiratory symptoms in the short-term and chronic respiratory diseases such as asthma, cardiovascular diseases and lung cancer in the long-term. Children and the elderly may be particularly vulnerable.
PM10 – tiny particulate matter small enough to be inhaled into the deepest part of the lung – is monitored in OECD countries because it can harm human health and reduce life expectancy. In Australia, PM10 levels are 13.9 micrograms per cubic meter, lower than the OECD average of 20.9 micrograms per cubic meter and the annual guideline limit of 20 micrograms per cubic meter set by the World Health Organization.
Access to clean water is fundamental to human well-being. Despite significant progress in OECD countries in reducing water pollution, improvements in freshwater quality are not always easy to discern. In Australia, 91% of people say they are satisfied with water quality. This figure is higher than the OECD average of 84% and suggests Australia has been successful in providing good quality water to its inhabitants.
More ResourcesHow's Life? at a Glance OECD Environmental Outlook to 2030
Governance – Australia expand
A cohesive society is one where citizens have a high degree of confidence in their governmental institutions and public administration. In Australia, 71% of people say they trust their political institutions, more than the OECD average of 56% and one of the highest rates in the OECD. High voter turnout is another measure of public trust in government and of citizens’ participation in the political process. In the most recent elections for which data is available, voter turnout in Australia was 93% of those registered; this figure is the highest in the OECD area where average voter turnout is 72%.
While voter turnout is indeed compulsory (and strongly enforced) in Australia, it is nevertheless a useful measure of citizen engagement. In the context of the Better Life Index, voter turnout measures how civic engagement contributes to the well-being of people and society. From this perspective, the Australian political system performs well in the sense that it reflects the will of a very large number of individuals (irrespective of what drives high participation).
There is little difference in the voting rates of men and women in most OECD countries. This is the case in Australia, where voter turnout is nearly the same for men and women. While on average there are few differences between men and women concerning participation in elections, income can have a strong influence on voter turnout. In Australia, because voter turnout is compulsory, participation is high across all income groups. Voter turnout for the top 20% of the population is an estimated 94%, slightly above the estimated 92% participation rate of the bottom 20%. This 2 percentage point difference, much lower than the OECD average difference of 11 percentage points, suggests there is broad social inclusion in Australia’s democratic institutions.
Ensuring that government decision making is not compromised by conflicts of interest is key to maintaining trust in government. Transparency is therefore essential to hold government to account and to maintain confidence in public institutions.
Freedom of information laws (FOI) allow the possibility for individuals to access undisclosed information. For such policies to be successful, the public should have a clear understanding of their rights under the law, should be able to file requests with ease and should be protected against any possible retaliation. People in Australia can file a request for information either in writing, online, or in person – thus greatly facilitating the FOI process. However, there are no provisions for anonymity or protection from retaliation.
Better Policies for Better Lives
A “Declaration of Open Government”
Australia is committed to more open government, built around three key principles: strengthening access to information, collaborating with citizens on policy and service delivery and making government more consultative and participative. This includes making more use of Internet to engage with the public and being proactive in sharing information.
Public consultation in decision-making is an essential part of the open government process. Thus, the National Compact, which aims to strengthen the working relationship between the federal government and the not-for-profit sector, was developed following extensive consultations between the government and the sector.
More ResourcesHow's Life? at a Glance
Health – Australia expand
Most OECD countries have enjoyed large gains in life expectancy over the past decades, thanks to improvements in living conditions, public health interventions and progress in medical care. Life expectancy at birth in Australia stands at 82 years, two years above the OECD average of 80 years. Life expectancy for women is 84 years, compared with 80 for men, a slightly smaller difference than the average OECD gender gap of six years, with a life expectancy of 83 years for women and 77 years for men.
Higher life expectancy is generally associated with higher healthcare spending per person, although many other factors such as living standards, lifestyles, education and environmental factors have an impact on life expectancy. Total health spending accounts for 9.1% of GDP in Australia, less than the 9.5% OECD average. However, Australia ranks above the OECD average in terms of total health spending per person, at 3670 USD in 2010, compared with an OECD average of 3268 USD. Between 2000 and 2009, total health spending in Australia increased in real terms by 4.6% per year on average, a growth rate similar to the OECD average of 4.7%.
Throughout the OECD, tobacco consumption and excessive weight gain remain two important risk factors for many chronic diseases. Australia provides an example of a country that has achieved remarkable progress in reducing tobacco consumption, cutting by more than half the percentage of adults who smoke daily from 35.4% in 1983 to 15.1% today. The smoking rate among adults in Australia is now one of the lowest in the OECD, equal to the United States and behind only Mexico, Sweden and Iceland. Much of the decline in Australia can be attributed to policies aimed at reducing tobacco consumption through public awareness campaigns, advertising bans and increased taxation.
In many OECD countries, large proportions of the population are overweight or obese. In Australia, the obesity rate among adults is 24.6%, higher than the OECD average of 17.8%. Obesity rates are high in Australia, and they have been increasing faster than in most other OECD countries over the last 20 years. Obesity’s growing prevalence foreshadows increases in the occurrence of health problems such as diabetes, cardiovascular diseases and asthma, and higher health care costs in the future.
When asked, “How is your health in general?” 85% of people in Australia said they were in good health, higher than the OECD average of 69%. Despite the subjective nature of this question, answers have been found to be a good predictor of people’s future health care use. Gender, age and social status may affect answers to this question. On average in OECD countries, men are more likely to report good health than women, with an average of 71% for men and 66% for women. In Australia, however, the difference is small, with 85% of positive answers for women and 84% for men. Not surprisingly, older people report poorer health, as do those who are unemployed, or who have less education or income. About 93% of the top 20% of the adult population in Australia rate their health as ‘good’ or ‘very good’, compared to about 75% for the bottom 20%.
More ResourcesHow's Life? at a Glance
Life Satisfaction – Australia expand
Happiness or subjective well-being can be measured in terms of life satisfaction, the presence of positive experiences and feelings, and the absence of negative experiences and feelings. Such measures, while subjective, are a useful complement to objective data to compare the quality of life across countries.
Life satisfaction measures how people evaluate their life as a whole rather than their current feelings. It captures a reflective assessment of which life circumstances and conditions are important for subjective well-being. When asked to rate their general satisfaction with life on a scale from 0 to 10, Australians gave it a 7.2 grade, higher than the OECD average of 6.6.
There is little difference in life satisfaction levels between men and women across OECD countries. This is true in Australia, where both men and women gave their life a 7.2 grade. Education levels influence subjective well-being in many OECD countries but in Australia the difference is relatively small. Whereas people who have only completed primary education have a life satisfaction level of 7.1, this score reaches 7.4 for people with tertiary education.
Happiness, or subjective well-being, is also measured by the presence of positive experiences and feelings, and/or the absence of negative experiences and feelings. In Australia, 84% of people reported having more positive experiences in an average day (feelings of rest, pride in accomplishment, enjoyment, etc) than negative ones (pain, worry, sadness, boredom, etc). This figure is higher than the OECD average of 80%.
More ResourcesHow's Life? at a Glance
Safety – Australia expand
Personal security is a core element for the well-being of individuals, and largely reflects the risks of people being physically assaulted or falling victim to other types of crime. Across the OECD, assault rates have generally declined in the past five years. In Australia, 2.1% of people reported falling victim to assault over the previous 12 months, less than the OECD average of 4.0%. There is little difference between men and women in assault rates, at 2.5% for men and 1.7% for women.
The homicide rate (the number of murders per 100,000 inhabitants) is a more reliable measure of a country’s safety level because, unlike other crimes, murders are usually always reported to the police. According to the latest OECD data, Australia’s homicide rate is 1.0, lower than the OECD average of 2.2. The homicide rate for men is 1.5 compared with 0.6 for women.
Fear of crime is another important indicator as it can constrain behaviour, restrict freedom and threaten the foundation of communities. Despite a general reduction in assault rates in the past five years, in many OECD countries feelings of security have declined. In Australia, 64% of people feel safe walking alone at night, slightly lower than the OECD average of 67%. While men are at a greater risk of being victims of assaults and violent crimes, women report lower feelings of security than men. This has been explained by a greater fear of sexual attacks, the feeling they must also protect their children and their concern that they may be seen as partially responsible.
More ResourcesHow's Life? at a Glance
Work-Life Balance – Australia expand
Finding a suitable balance between work and life is a challenge for all workers, especially working parents. Some couples would like to have (more) children, but do not see how they could afford to stop working. Other parents are happy with the number of children in their family, but would like to work more. This is a challenge to governments because if parents cannot achieve their desired work/life balance, not only is their welfare lowered but so is development in the country.
People spend one-tenth to one-fifth of their time on unpaid work. The distribution of tasks within the family is still influenced by gender roles: men are more likely to undertake more hours of paid work, while women spend longer in unpaid domestic work. Men in Australia, spend 172 minutes per day cooking, cleaning or caring, one of the highest scores across OECD countries but less than Australian women who spend 311 minutes per day on average on domestic work.
An important aspect of work-life balance is the amount of time a person spends at work. Evidence suggests that long work hours may impair personal health, jeopardize safety and increase stress. People in Australia work on average 1 693 hours a year, less than the OECD average of 1 776 hours. The share of employees working more than 50 hours per week is not very large across OECD countries. In Australia, however, more than 14% of employees work very long hours, much more than the OECD average of 9%. Overall, men spend more hours in paid work: in Australia 21% of men work very long hours, compared with 6% for women.
The more people work, the less time they have to spend on other activities, such as time with others or leisure. The amount and quality of leisure time is important for people’s overall well-being, and can bring additional physical and mental health benefits. People in Australia devote 60% of their day, or 14.4 hours, to personal care (eating, sleeping, etc.) and leisure (socializing with friends and family, hobbies, games, computer and television use, etc.) – less than the OECD average of 14.9 hours. Fewer hours in paid work for women do not necessarily result in greater leisure time. In Australia, both men and women devote approximately 14 hours per day to personal care and leisure.
Better Policies for Better Lives
Helping single parents find paid work
Australia performs well on a number of important outcomes of work-life balance: fertility (1.9 children per women) is above the OECD average (1.7), the female employment rate (66.2%) has been rising steadily since the 1960s and is now well above OECD average (59.6%), and the gender wage gap (12%) is below average (16%). Unlike many other OECD countries, mothers often return to full-time work once their children reach schooling age.
However, joblessness among sole parent families is a significant problem. At just over 50% in 2009 the sole-parent employment rate is one of the lowest in the OECD, which contributes to an above average poverty rate for sole-parent families. This issue is of particular concern as around one in five children live in such households, and projections show that the number is likely to increase by 20% over the next 25 years. Australian policy should therefore continue to support work, training or job search requirements for recipients of sole-parent benefits.
Australia does well for most of its children as measured by outcomes within the three key dimensions of material well-being, education and health. The child poverty rate has fallen over the last 10 years and is now below the OECD average, PISA reading scores are above the OECD average, older children are less likely to be out of education or employment, and the incidence of infant deaths has also seen a large decline.
Despite above average public expenditure on families, Australia spends less on childcare services than most OECD countries: 0.4% of GDP compared with the OECD average of 0.6%. This has contributed to low childcare enrolment rates for young children, with only 40% of children aged less than six years enrolled in formal childcare. Australia should consider extending its childcare support programmes to provide more help to working parents.