The Focus on Sustainability in Lieu of GDP Growth – Towards a Socially Responsible Stimulus for Australia

Abstract

Whenever GDP estimates display a slowdown, governments and their policy-makers rush to stimulate the economy without reference to two vital items that serve as foundational capital and stabilize economy. These are: Nature - Environmental Capital (KN); and Society - Social Capital (KS). Most macroeconomists mistakenly believe that KN-KS issues are meant for the content of microeconomics. Therefore, such issues remain outside the domain of macroeconomics, and in turn GDP, which is the indicator of macroeconomic performance. The main premise advanced here is that whenever an economy slows down – the first port of call needs to be an examination of its KN-KS foundation. This paper illustrates that notwithstanding climate change and global warming, Australia’s current predicament pertains also to the sustained neglect and depletion of her foundational elements in excess of 200 years. Explicit efforts to restore these lost endowments, at least in part, represent opportunities for employment creation – especially in the context of the Corona Virus outbreak. It is important to alter the possibility of what was once called the lucky country from becoming an unlucky one.