Australia drops three places in global prosperity index due to economic factors

LIFE in Australia is more expensive, has fewer opportunities and is more inefficient than a decade ago, according to a global index that ranks the country ninth place overall having dropped from number one in 2008.

That’s according to the Legatum Prosperity Index which analysed 149 countries around the world based on nine key “pillars of prosperity”.

Taking into account economic quality, business environment, governance, personal freedom, social capital, safety and security, education, health and natural environment, the study found Australia had dropped to ninth from number six last year.

While Australia had the world’s highest level of social capital — the strength of personal relationships, social networks and civic participation — the fall was mainly due to a decline in economic quality of life.

The country scored a 20 for the pillar relating to the openness of the economy and foundations for growth, economic opportunity and financial sector efficiency.

“The government is perceived to be significantly less encouraging of competition than before, and unemployment is still above 2008 levels,” the authors said.

“The Australian labour market ranks 95th in the world for its flexibility, and for trade competitiveness Australia is 62nd overall.”

Norway scored number one on the index while New Zealand was number two, with the countries having swapped places from their 2016 ranking.

Finland, Switzerland, Sweden, the Netherlands, Denmark and Canada came next ahead of Canada, Australia and the UK.

The Institute said the fact the “Nordics and Anglosphere” dominate the list “demonstrate more than one path to prosperity is possible”.

“The Anglosphere nations have presented themselves as more diverse centres of enterprise with thriving social capital, while the Nordic model has for a long time offered a high standard of living and egalitarian outcomes to its citizens.”

Meanwhile Asia-Pacific countries showed the greatest gains through places like India, China, Pakistan and Indonesia where business growth is fuelling social mobility.

Overall, global prosperity was found to be at its highest level in the last decade and is faster growing than ever before. But the gap between highest and lowest countries has increased and the spread between countries is growing.

The Legatum Group was originally established by Dubai-based, New Zealand-born billionaire Christopher Chandler, however it’s reputation in the UK has become controversial after it was dubbed the “Brexiteers favourite think-tank” and criticised for supplying much of the rationale behind Brexit.

The Institute’s Foundation is funded by charitable donors and claims it simply focuses on global prosperity, recently denying allegations it was providing cover for a hard Brexit, saying they were flattering but “absurd”.

The report claimed despite global “turbulence”, prosperity continues to increase, along with levels of social capital which has improved more than any other “institutional pillar” over the last decade.

“A person’s social and economic wellbeing is best provided for in a society where people trust one another and have the support of their friends and family.

“Prosperity is at its highest point for 10 years, and yet too few of the world’s inhabitants are enjoying its fruits. Much needs to change to enable all nations to fulfil their potential in the

nine pillars of prosperity.”

It also showed safety and security continued to decline, partly due to the Syrian civil war. Western Europe’s prosperity levels also overtook North America for the first time, with the US and Canada falling due to a rising number of murders and greater societal pressure on citizens’ freedom of religion.