How to create a wellbeing economy

We explain the basics of a wellbeing economy before we delve into the Australian context and the 5-stages in our wellbeing economy toolkit.

As a world-first health promotion foundation, VicHealth has been thinking about a wellbeing economy for a while.

We’re excited to share the latest developments in Australia’s wellbeing economy with the recent release of the federal framework, 'Measuring What Matters.' This framework represents a significant step towards a sustainable economy that prioritiszes the wellbeing of people and the planet.

Read on for answers to common questions about a wellbeing economy, examples (case studies) and how to progress a wellbeing economy (using our toolkit).

What you'll find on this page

• What is a wellbeing economy?
• Benefits of a wellbeing economy
• Does a wellbeing economy help to address climate change?
• Does a wellbeing economy help with mental health? 
• Does Australia have a wellbeing economy?
• Who are the key players on the topic of a wellbeing economy?
• Who is doing a wellbeing economy well?
• How does Australia move forward with a wellbeing economy?
• What is our wellbeing economy vision for Victoria?
• How to implement a wellbeing economy (toolkit) 
• What are examples of wellbeing economies around the world? (Case studies)

Want to go straight to the toolkit?

What is a wellbeing economy?

A successful intergenerational wellbeing approach transforms economic and political systems to serve a more holistic understanding of quality of life and collective wellbeing that benefits both people and the planet.

A wellbeing economy moves beyond the focus on Gross Domestic Product (GDP) and economic growth as our primary markers of progress, shifting towards indicators that prioritise health, social and environmental outcomes for the people today and the generations of the future.

This is because the way communities feel about their life is increasingly at odds with headline economic indicators like Gross Domestic/State Product and inflation. The concept of wellbeing economies has been developed to address this gap. It is giving governments across the world a new way to think about social progress and target funding to make the biggest difference.

Video: leaders from VicHealth and VCOSS describe a wellbeing economy

In the video below, Dr. Sandro Demaio, CEO, VicHealth and Emma King, CEO, Victorian Council of Social Service (VCOSS) explain the purpose of a wellbeing economy.

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A wellbeing economy is designed with the purpose of serving the wellbeing of people and the planet first and foremost; in doing so, it delivers social justice and a healthy planet. A wellbeing economy is also about integrating wellbeing into every corner of Government decision making ensuring our leaders consider the long-term impact of policy on people’s lives and the planet. It could support people and policymakers with:  

• Pursuing solutions that have holistic benefits for individuals and communities. 
• Protecting our most marginalised people while also protecting the planet.
• Taking into account the needs of the present without compromising the ability of future generations to meet their needs. 
• Addressing challenges that often fall between governmental departments. 

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Does a wellbeing economy help to address climate change?

Yes, a wellbeing economy helps to address climate change, because unlike traditional economic markers of progress like Gross Domestic Product (GDP), it defines the markers of progress as the things that serve the wellbeing of people and the planet (health, social and environmental outcomes for the people today and the generations of the future).

The idea of a wellbeing economy has grown from previous ideas including sustainable development approaches which sought to limit exponential economic growth at the expense of planetary and people’s wellbeing. 

A wellbeing economy seeks to capture and ultimately mitigate the impact climate change is having on our natural environment, communities and security for future generations.

Environmental sustainability and security us at the heart of a wellbeing economy as no-one can live well on a dead planet.

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Yes, a wellbeing economy helps support positive mental health outcomes because, unlike traditional economic markers of progress like Gross Domestic Product, it defines the markers of progress as the things that serve the wellbeing of people and the planet (health, social and environmental outcomes for the people today and the generations of the future). 

A wellbeing economy would naturally support investment in health (physical and mental) promotion, prevention and early intervention to enable people to live healthier lives and stop ill health in the first place. It would also support investment to properly support and care for people who already have ill health. 

The built environment can have a critical influence on our community's health. The development of safe, inclusive and supportive environments for all citizens is an integral aspect of a healthy, productive and well society. A wellbeing economy that more broadly seeks to change the whole of government and the way they regulate and invest in environments will lead to the support of our health and wellbeing. A wellbeing governance system supports the creation of walkable communities and active transport options, access to green space and access to healthy, affordable, fresh food all of which also support mental wellbeing.

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With the July 2023 announcement of Australia's first wellbeing framework, 'Measuring What Matters,' we have taken a big step towards establishing our own wellbeing economy.

This lays the foundation to understand, measure and improve on the things that matter for Australians. 

The purpose of this Framework is to provide a resource which can help inform government decision making. It’s also a tool to be used in areas of policy that require different levels of government to work together.

The Framework's value goes beyond the government, as it is tailored to assist businesses, academia, and communities in their endeavors to improve the lives of all Australians.

You can deep dive into the Framework’s dashboard here.

View dashboard

VicHealth provided a submission to the measuring what matters consultation which can be found here.

Other examples

The ACT (Australian Capital Territory) provides a good case study for how the initial stages of progressing a wellbeing economy policy are about establishing what really matters. VicHealth commissioned a wellbeing policy toolkit to support the progression of a wellbeing economy - either at the national, state or territory level. It includes opportunities to further existing Australian policies on the topic. 

Also see: Next steps for Australia to get a wellbeing economy

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Around the world and in some parts of Australia, governments are now experimenting with more holistic and longer-term visions of progress so that collective wellbeing becomes the ultimate measure of economic success. 

In Australia

The Federal Government has developed Australia’s first wellbeing framework that tracks our progress towards a more healthy and sustainable Australia. Read more about it here.

We at VicHealth:  
 

• We made a submission to the Royal Commission into Victoria's Mental Health System, and our definition of mental wellbeing was adopted by the Royal Commission in their final report. 
   
• Commissioned a 2020 report on integrating wellbeing into the business of government, which resulted in a 2021 Roundtable which Dr Sandro Demaio (VicHealth CEO) opened and included this conversation with Dr Katherine Trebeck. 
   
• We’ve taken all this reporting and thinking a step further by commissioning a wellbeing economy toolkit (prepared by Dr Alexandra Jones and Chelsea Hunnisett from The George Institute for Global Health).   
   
• We made a submission in response to the Federal Governments Measuring What Matters consultation in early 2023.
   

Outside VicHealth:
 

• The Centre for Policy Development has embarked on an Intergenerational Wellbeing Program that works tackling disadvantage over the long term, both in Australia and further across the Asia-Pacific.
   
• The George Institute for Global Health continues to be a leader in this space and hosted this #GeorgeTalks webinar: Measuring what matters: What a wellbeing economy can do for all Australians.
   
• Victorian Council of Social Services (VCOSS) have published their listening report, along with their election platform, which incorporates a wellbeing chapter that VicHealth supports.  
   
• New Economy Network Australia (NENA) hosts the Australian hub of the global Wellbeing Economy Alliance (WEAll). 
   
• ANDI (Australian National Development Index) uses a set of social, health, economic, and environmental factors, twelve domains provide a complete picture of national wellbeing. 
   
• Regen Melbourne is a network of passionate individuals and organisations coming together to create a safe, just and prosperous future for Melbourne.

Australian State Governments

• ACT Wellbeing Framework looks at wellbeing in terms of how we are doing, as individuals, as a community, and as a place to live.  
   
• New South Wales produced an initial report  on developing a wellbeing framework for policy and budgets in the state.
         
• Queensland's Health and Wellbeing Queensland Act 2019 established a health promotion agency, ‘Health and Wellbeing Queensland’. Whilst the Act does not define wellbeing, Health and Wellbeing Queensland is developing frameworks that will help. A Wellbeing Framework will provide a holistic view of health and wellbeing that highlights the multiple layers at which wellbeing interacts – individual, community, society and planet.
   
• South Australia Government has launched The Wellbeing Index for South Australia, designed to  It was developed by the state government agency Wellbeing SA.
   
• The Tasmanian Premier announced his intention to develop a whole-of-state Tasmanian well-being framework which is intended to reflect community priorities and to guide budgets and policymaking. 
   
• Western Australia have been working on a wellbeing measurement and development framework.

Globally
 

• Wellbeing Economy Alliance (WEAll) recognises that the economy is embedded in society and nature. In Australia, New Economy Network Australia (NENA) hosts the Australian hub of the global WEAll.
   
• The Canadian Index of Wellbeing covers the presence of the highest possible quality of life in its full breadth of expression. Regenerative finance is shifting the economy by transferring control of capital to communities most affected by racial, economic, and environmental injustices.
   
• Carnegie UK Trust published a report on measuring what really matters. In 2023, with the Centre for Thriving Places, they published a further report The Shared Ingredients for a Wellbeing Economy.
    
• European Union ‘Beyond GDP’ Initiative aims to develop indicators that are as clear and appealing as GDP, but more inclusive of environmental and social aspects of progress.
   
• Finland also have a wellbeing economy policy approach that is also tied to the Sustainable Development Goals.
   
• Iceland have developed an Indicator for Well-being that links to the Sustainable Development Goals.
   
• The New Zealand Treasury 2019 living standards framework identifies 12 domains of current wellbeing.
   
• Scotland is a founding member of the Wellbeing Economy Governments (WEGo) group, an initiative where member countries are working together to understand the key priorities for a wellbeing economy.
    
• The United Nations’ 17 Sustainable Development Goals, defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
   
• The UK Government introduced the Wellbeing of Future Generations Bill in 2020 and is committed to Sustainable Development Goals.
   
• Wales has defined wellbeing through a set of wellbeing goals in part 2, s.2 of the Well-being of Future Generations (Wales) Act 2015. 

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Video: VicHealth CEO Dr Sandro Demaio gives examples of wellbeing economies 

Learn about 2 strong examples of wellbeing economies in the video below, or scroll down to read about them.

Wales 

Wales has defined wellbeing through a set of wellbeing goals in part 2, s.2 of the Well-being of Future Generations (Wales) Act 2015. The Act embeds structural changes in government decision making by requiring all public bodies to comply with seven wellbeing goals and five ways of working whilst carrying out their duties. It also establishes an independent Future Generations Commissioner to hold government to account on action and sets a range of national wellbeing indicators to be reported against regularly.  
 

ACT (Australian Capital Territory) 

The ACT Wellbeing Framework looks at wellbeing in terms of how we are doing, as individuals, as a community, and as a place to live.

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Wellbeing flower image: from the ACT Wellbeing Framework comprises 12 domains of wellbeing, reflecting key factors that impact on the quality of life of Canberrans.

The ACT Government uses the framework to inform government priorities, policies and investment decisions, including through Budget and Cabinet processes. The framework is the foundation of deeper structural change in the ACT Government, transforming decision making and measurement. 
 

Also see: What are examples of wellbeing economies around the world? (Case studies)

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By integrating intergenerational wellbeing into the business of government. That is, by moving beyond the totalitarianism of GDP and economies as the sole measures of progress to a system that accounts for things that really matter: physical and mental health, the environment, community and wealth distribution, equity and meeting our needs while caring for future generations.

VicHealth commissioned a wellbeing policy toolkit to support this work in Victoria. 

Video: 5 important things Victoria needs to build a wellbeing economy

In the video below VicHealth CEO Dr Sandro Demaio outlines 5 things that would progress a wellbeing economy. Also see: What is our wellbeing economy vision for Victoria? and How to implement a wellbeing economy (toolkit).

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Intergenerational Wellbeing- Victoria to not be left behind.

We want a Victoria where all Victorians, now and into the future are able to life healthy and full lives.

We want to invest in our health and wellbeing, as well as the health of our communities, economy and the planet.

The first step in designing a wellbeing economy is understanding what matters for Victorians. We want to ensure all Victorians have a say in their needs and wants for today and for generations to come – with future Victorians getting a say about what they need. The implementation process would therefore need to include real, continual community engagement. 

The implementation process would therefore need to include real, continual community engagement.

Implementing a wellbeing economy would look like a Government that:

• delivers annual wellbeing budgets

• developed a wellbeing framework

• appointed a Minister for Wellbeing that sits within the Department of Premier and Cabinet who ensures a whole of Government approach to policy making

• passing a Wellbeing Economy bill to future proof wellbeing for all generations

Ultimately, we would see a state that invests in prevention, health promotion and healthy communities.

Imagine a Victoria where we all have access to:

• safe and affordable housing
• high quality education
• jobs close to home
• fresh, affordable and sustainable fruit and veg
• well-connected transport systems
• walkable neighbourhoods where everything you need is less than 20 minutes away
• equality, justice, and fairness for all

That’s good for wellbeing. That’s a wellbeing economy.  

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Wellbeing economy toolkit  

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We commissioned The George Institute for Global Health to provide a toolkit to progress wellbeing economy approaches in Australia. 

The toolkit looks at how we might implement a wellbeing economy in Victoria including frameworks, strategy, economic policies, implementation and evaluation. 

Toolkit contents: 5-stage summary  

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1. Develop a wellbeing vision, framework and measurements 

Set a different vision of progress – away from purely economic indicators such as GDP which don't improve wellbeing:  

• Understand what matters for wellbeing 
• Craft and communicate your wellbeing vision 
• Measure wellbeing 
   

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2. Design a strategy to foster the areas of economic life most important for our wellbeing 

Define the concrete changes in the economy required to achieve your wellbeing goals: 

• Identify wellbeing economy activities and behaviours 
• Align institutions and stakeholders for wellbeing 
• Manage trade-offs and power dynamics 

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3. Assess and co-create Wellbeing Economy policies to build a coherent and innovative policy mix 

Create a series of gradual reforms to progress powerful change: 

• Assess and reform existing policies 
• Co-create new ones 

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4. Successfully implement Wellbeing Economy policies by empowering local stakeholders and communities 

Mitigate implementation challenges:  

• Learn from stakeholder engagement examples in Wales, New Zealand, Scotland, Iceland, Finland, France and Canada 
• Give stakeholders a clear understanding of the logic behind policy work
• Co-design so they can effectively tailor policies to their context 

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5. Evaluate policy impacts on wellbeing for learning, adaptation and success 

Connect the dots and measure the impacts – from unexpected barriers to the the great successes and everything in between. 

The toolkit outlines: 

• Wellbeing assessments (resources and case studies)
• Identify best practice and lessons for improvement 

Access more detailed information about each stage

Download the complete toolkit:

Networks that governments can join for peer support 

• Wellbeing Economy Governments Partnership (WEGo)  
• New Economy Network of Australia (NENA)  
   

Training courses in Australia  

• Building a Wellbeing Economy Course 

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The wellbeing economy toolkit outlines several case studies.

Below is a snapshot of how they represent the different stages of progressing a wellbeing economy: 

• Establishing what matters (ACT and OECD)
• Implementation (Wales and New Zealand)
• Evaluation (Australian Social Bank Calculator)

Establishing what matters

Case study: The Australian Capital Territory’s Wellbeing Framework

The Canberra Wellbeing Framework(2020) introduces 12 thematic areas or ‘domains’, developed through their community consultation process in 2019–20. The ACT Government uses the framework to inform government priorities, policies and investment decisions, including through Budget and Cabinet processes. The framework is the foundation of deeper structural change in the ACT Government, transforming decision making and measurement. for quality of life in the Australian Capital Territory?

Case study: The OECD’s thought leadership 

The OECD has played a pivotal role in helping countries craft their Wellbeing Vision. One of its major founding initiatives was a 2009 Report by the Commission on the Measurement of Economic Performance and Social Progress, led by Jean-Paul Fitoussi and Nobel laureates Joseph Stiglitz and Amartya Sen, and commissioned by the former French president, Nicholas Sarkozy. It recommended the development of wellbeing and sustainability indicators to guide policy, making 12 recommendations for measuring economic and social performance, including the need for multiple indicators or a ‘dashboard’ approach to measuring wellbeing. More recently, the OECD has developed a guide to crafting a Wellbeing Vision framework. The guide is built around three components: current wellbeing, inequalities in wellbeing outcomes and resources for future wellbeing. 

Implementation

Case study: Wales’ Well-being of Future Generations Act 

The Well-being of Future Generations Act was adopted in 2015 and is the result of a long process of working to integrate a sustainable development approach into Welsh policymaking, including the process of public consultation, ‘The Wales We Want’, outlined above. The Act embeds structural changes in government decision making by requiring all public bodies to comply with seven wellbeing goals and five ways of working whilst carrying out their duties. It also establishes an independent Future Generations Commissioner to hold government to account on action and sets a range of national wellbeing indicators to be reported against regularly. This legislative tool reflects a whole-of-government commitment to deeper structural change and embeds a wellbeing agenda within every process and decision of all bodies and organisations in the country. It is useful to governments in progressing a wellbeing approach by providing an example of both a cultural and practical shift in government and society, bringing all sectors together through a cohesive framework. 

Case study: New Zealand’s  Wellbeing Budget

The Wellbeing Budget was introduced in May 2019 and firmly grounds the wellbeing agenda in the resource allocation and budgeting process. While relatively recent, the Wellbeing Budget builds upon many years of prior work within the Treasury to develop the Living Standards Framework that underpins it. All budget proposals must be assessed on the difference they would make across a range of economic, social, environmental and cultural considerations. This assessment is assisted by a new cost-benefit analysis tool (CBAx), which allows public-sector agencies to calculate the value and impact of wellbeing policies. This process is now enshrined in the Public Finance (Wellbeing) Amendment Act 2020, which requires all future governments to report annually on wellbeing objectives in the Budget, and requires the Treasury to report periodically on the state of wellbeing in their Wellbeing Reports. Additionally, the Local Government (Community Well-being) Amendment Act 2019 places responsibility upon local governments to determine whether activities in their communities promote the social, economic, environmental and cultural wellbeing of the community. Their coordination of the public service response to local wellbeing needs means that the broader wellbeing objectives can be experienced in practice.

Evaluation

Australian Social Value Bank Calculator 

The Australian Social Value Bank is a bank of social values and a value calculator that can be used by any group, organisation or professional to demonstrate social impact. The Bank contains data on 63 different social values related to all aspects of Australian life, derived from Australian datasets using a wellbeing valuation approach. Wellbeing valuation calculates both primary benefits to individuals and secondary benefits to others (including cost savings to governments via reduced welfare payments, for example).

More case studies

See further case studies and policy applications in our wellbeing economy toolkit:

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