On Monday we had the Better Life Index in my post Reasons to be Cheerful: Part Three which is about listing the happiest countries in the world. Australia romped home on that one for the fourth year running.
So, that’s it then, Australia = happy.
Or does it? Let me introduce you to…
The Misery Index
“The misery index concept can be applied to any country where suitable data exist. A misery index — a simple sum of inflation, lending rates, and unemployment rates, minus year-on-year per capita GDP growth — is used to construct a ranking for 89 countries.” – Cato Institute.
The misery index has a long history and was first created by economist Arthur Okun under President Johnson’s administration in the United States during the 60s. It was a reasonably straightforward formula based on inflation and unemployment.
The misery index has gone through a few changes since then and in recent years economist Steve H. Hanke has adapted it and applied it to 89 countries to create a World Table of Misery.
- Question: How miserable are Australians?
- Answer: 13.3
I think that probably needs a little more explanation.
World Table of Misery Index Scores
Remember, in this table a high score is bad, very bad. A low score is good, very good. The specific formula, I believe, is:
- Unemployment Rate + Lending Rate + Inflation Rate – % Change in GDP/Capita
…with all those ingredients having been gathered, with care, from the Economist Intelligence Unit.
According to this index then, Australia, with our high interest rates, is more miserable than the USA and the UK with their unemployment problems.
As you can see though, the least miserable countries on the planet are:
- Republic of Korea
Who would have thought?
Particularly astonishing is Singapore in third place. It wasn’t that long ago that they earned themselves the reputation of being the ‘least positive’ country in the world and before that, the world’s most emotionless society.
It just goes to show you that it isn’t all about inflation, unemployment, interest rates and GDP.
Which brings me to last night’s budget.
- Cough up $7 if you visit a bulk billing doctor.
- And another $7 for pathology, imaging, x-ray or an MRI.
- Plus $5 extra on your prescription.
- Petrol prices up. (Yawn)
- Some people may lose out on Family Tax Benefit B
- 16,500 government jobs to go over three years.
- Higher tax for high earners ($180,000+ per year).
- Study fees to go up.
- Student loans to be paid back earlier.
- Unemployment benefit rules tougher.
- Pension age to rise to 70 in 2035.
- Disability Support Pension rules tightened.
Yada yada yada. There was some good news in there somewhere, but none of us believe that do we?
The irony is this budget is clearly designed to get that magic number of 13.3 down, in other words to improve our economy.
Oh, and make us less miserable.
For full details of this year’s Australian budget and a really snazzy interactive tool to see how it will affect you, see What Does The Budget Mean To You?