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Australian health, wellbeing and connectedness shrinking in the cost-of-living crisis, research finds

Demographer James O’Donnell likes to talk about Australia’s Matildas moment – a span of time in the recent past when people from all walks of life rallied behind a common aspiration and shared a sense of national identity.

“That was a really unifying moment,” O’Donnell says. “Then we go straight into this divisive debate around the voice to parliament. How that is playing out in the data is something we are still grappling with.”

O’Donnell is the lead researcher of the Australian Cohesion Index spearheaded by the Scanlon Foundation Research Institute. The index, to be released on Wednesday, provides a barometer of the health, wellbeing and connectedness of Australian society between 2008 and 2022. It draws on data from multiple sources: Scanlon’s separate Mapping Social Cohesion study, surveys from the Australian Bureau of Statistics and information from the Australian Electoral Commission.

The research maps Australia’s national mood.

The economy is continuing to grow and the labour market is strong. But the cost-of-living squeeze has been a slow burn over more than a decade – not just the past two years. Housing and financial stress had been building, measurably, during the decade prior to Covid-19. Government support during the pandemic masked the squeeze on households, but stress is increasing once again.

The “lives and livelihoods” era of the pandemic, when governments collaborated to keep workers and businesses afloat, also prompted a rebound in trust – in one another and in the political system.

O’Donnell says Australia recorded an increase in life expectancy during the pandemic. “As a demographer, that was a big thing for us, because almost no one in the world had an increase in life expectancy during the pandemic,” he says. “That was a positive story for our connections and cohesion – the fact we responded so well to such strong government attempts to keep us locked down in a way that most other countries didn’t do.”

But trust has been declining since 2021.

Australians are now very conscious of material pressures and “that seems to be shaping trust in government, trust in other people”, O’Donnell says. These pressures have “flow on social effects”. We are less involved in our communities than we used to be. A shared sense of national pride and belonging also appears to be declining.

The new research says this trend is in evidence across society. But it is particularly evident in young adults and people under the pump financially. This cohort – young adults and people in financial distress – are among the least trusting in society, which points to “important social inequalities in Australia that are weighing down our overall social cohesion”.

O’Donnell’s research suggests the two most important predictors of a person’s perceived sense of social cohesion in Australia are age and level of financial security. People who are struggling financially are also 32% more likely to report being unhappy in the past 12 months.

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The report notes financial hardship is not just an economic issue but has “wider implications for the health and wellbeing of many Australians and for their connection to and participation in Australia’s social fabric”.

“People who describe themselves as poor or struggling to pay the bills are 29% less likely to have a great sense of belonging in Australia than people who are prosperous or living very comfortably, 16% less likely to feel they belong in their neighbourhood, 45% less likely to trust the federal government all or most of the time and 40% less likely to believe that most people generally can be trusted,” the report says.

Cash-strapped Australians are also less likely than richer households to think multiculturalism has been good for Australia. They are more likely to see immigrants as a social, cultural and economic problem. The research says hardship and inequality can create social division and “the potential for polarisation” while also contributing to less happiness and weaker personal wellbeing.

These forces – relentless cost-of-living pressure, declining social inclusion, rising concern about economic inequality – are the backdrop to the current referendum debate.

O’Donnell says qualitative interviews undertaken for the Australian Cohesion Index suggest financially stretched households lack the bandwidth to engage with the referendum question in a considered way. “I honestly think that for a lot of people, those bread-and-butter issues are so important that some of the noise around the voice has escaped them a little bit.”

Published opinion polling indicates young Australians have rallied around the voice proposal more than older voting cohorts, despite facing acute economic pressure.

But younger people are not buying in to the notion of shared identity. O’Donnell says a sense of belonging in a nation can increase with age, because connections grow as we get older. “But for millennials and younger people, this doesn’t seem to have happened, they seem to be becoming less attached to an Australian identity.

“Whether that’s a good or a bad thing is a mixed story, it’s social and generational change,” he says. “But it also has an intersecting influence with financial stress. Young people in financial stress are really sort of detached.

“There is an element of loneliness and social disconnection there.”

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