The cost of mental illness to Australia’s wellbeing has hit $200 billion a year – equivalent to about 12 per cent of the economy’s annual output.
The Herald-Lateral Economics Index of Australia’s Wellbeing – which provides a better measure of changes in national welfare than traditional economic data – shows the drag on our collective wellbeing caused by mental illness is worth $40 billion more than a decade ago.
The index’s author, Dr Nicholas Gruen, who is also the Chair of The Australian Centre for Social Innovation, said mental illness is “under-appreciated” as an economic problem.
“We’re not good at dealing with mental illness, and political debate rarely rises above advocacy for more funding – often for professionals,” he said.
“We need to confront our ignorance and build a learning system that systematically experiments to find solutions based on sound evidence that communities can embrace.”
About one in five adults experience mental illness in any year which makes it a major drag on Australia’s collective wellbeing. Traditional economic measures only pick up some of the financial impact of mental illness, such as days off work. But those with poor mental health tend to report much lower levels of wellbeing than average and the index puts a dollar figure on these major non-economic effects.
In 2005-06 the index put the wellbeing cost of mental illness at $159.7 billion but that had climbed to $203.1 billion by last financial year. The drag on wellbeing caused by mental illness was $52 billion in the June quarter alone.
The rising rate of obesity is another major drag on welfare. The index shows the annual wellbeing cost of obesity reached $122.5 billion last financial year. Australia has one of the world’s highest rates of obesity and drag on wellbeing caused by obesity measure has been growing more quickly than any other index component.
Despite the negative effects of mental illness and obesity rates, the wellbeing index overall rose by 2.5 per cent in the June quarter.
Australia’s net national income – another important component of wellbeing – registered a modest rise in the quarter.
Separate figures released by the Bureau of Statistics on Wednesday showed gross domestic product rose by 0.5 per cent, seasonally adjusted, in the June quarter.
This article first appeared on ‘The Sydney Morning Herald’ on 11 September 2016.