The Government's 'fabulous' budget reveals a deeper problem

The Coalition Government's first budget is based on a fable: we are a great nation and a great people, with a great quality of life and a great future.

None of this is true, but Treasurer Joe Hockey, like politicians before him, has to proclaim these things because to doubt them is to open up too many fundamental questions.

The budget debate has, unsurprisingly, focused on details of policy and their impacts. But there is a deeper conversation we need to have.

The truth is that our standard of living is unsustainable and our quality of life is, arguably, declining. And as a nation, a people, we are too gutless and immature to debate seriously the need to raise the public revenue to deal with these challenges.

The Treasurer claimed it would be unfair to future generations to leave them with any public debt - but not, it seems, to bequeath them a dangerously warming climate, a degraded environment and poorer health and wellbeing.

Hockey stressed the importance of Australia's 'prosperity'. My GP once said of medicine: 'Before we just tried to keep people alive; now people are staying alive, but they're not very happy'. Similarly, governments might well say: 'Before we just tried to make people richer; now they are rich, but they're not very happy'. Instead of asking what this means, governments remain focused on making us richer still.

Prosperity isn't enough anymore. Costs to quality of life can no longer be regarded as unfortunate side-effects of a model of progress whose effects remain largely beneficial. Instead they need to be seen as a direct and fundamental consequence of how we currently define and pursue progress.

Hockey said nothing in his budget speech about the environment - other than the abolition of the carbon tax. Yet our landscapes, a unique natural heritage on which our future food and water security depends, continue to degrade and need a massive restoration effort. Even our most iconic protected areas of Kakadu National Park and the Great Barrier Reef are deteriorating, with Kakadu described recently as 'a biodiversity basket case'. Climate change is exacerbating these losses, along with its other costs. Yet, on environmental issues, the Government is actually going backwards, doing less.

A recent global study found Australia's 'material footprint', the total amount of primary resources required to service domestic consumption was 35 tonnes per person in 2008, the highest in the world. By 2050, a global population of 9 billion people would require an estimated 270 billion tonnes of natural resources to fuel the level of consumption of today's developed countries - compared to the 70 billion tonnes consumed in 2010.

Most Australians do not believe quality of life is improving. Some surveys suggest we have become less satisfied with our lives over the past two decades, and less personally optimistic.

Hockey highlighted the benefits of the new medical research 'future fund', reflecting the dominant view that health is a matter of individual illnesses and their associated risk factors and treatments; social conditions are not part of the picture.

Yet research shows that despite marked increases in mental-health funding, antidepressant prescriptions, and Medicare-funded psychological services, Australians' mental health has not improved since the 1990s, and may have declined among some groups.

A study of almost 2000 young Australians published this year in the Lancet found 29 per cent of males and 54 per cent females reported common mental disorders such as depression and anxiety at least once during adolescence. Almost 60 per cent of these people went on to report a further episode as a young adult. Overall, 50 per cent of males and 70 per cent of females experienced one or more episodes of mental disorders by age 30.

The proportions would be about the same, and higher, if all mental disorders had been included in the survey. This is not just reflecting the emotional roller-coaster of adolescence: other research shows the average duration of adolescent depression is 26 weeks. In other words, our way of life is normalising mental illness, making it a majority experience.

We need to be clear about what material progress based on economic growth means. Over more than 200 years, it has made Australians, on average and in real terms, many times richer, and our lives, on average, much longer.

However, the extra dollars and years of life have been unevenly distributed: income inequality is now growing and disadvantage is becoming deeper and more entrenched. Increased wealth is not the only factor behind increased health and wellbeing: greater knowledge, better education and institutional reforms have also contributed. Medical advances may now be offsetting adverse health impacts of changing social conditions.

Beyond these issues, material progress has created an 'existential deficit', related to how and where we find meaning in life, which is central to wellbeing. Meaning has become more materialistic and individualised, reducing social cohesion, confidence, trust and stability, and leaving more of us personally vulnerable and isolated.

If we are to have any chance of securing our future, we need to see a concerted effort to shift economic activity from private consumption for shorter-term gratification to public investment for long-term, sustainable development.

The largely overlooked message of the budget is that political priorities and scientific understandings of our situation are moving in opposite directions.