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Polling by the Australian National University in March found “average life satisfaction” had dropped to its lowest point since the poll started in 2019.
Deakin University, which started its poll in 2002, found the same slump in 2024.
The Australian Bureau of Statistics has been tracking life satisfaction since 2014. The score has been falling each time it’s tallied.
That’s not to say Australians are unhappy. Our life satisfaction is relatively robust: on the ANU’s polling, it has dropped from a high of about 7/10 in 2019 to about 6.2/10 in 2026.
The measure is robust, but the trend is intriguing and picked up in many places. Consider, for example, how support for the populist grievance politics of One Nation has exploded in the past six months.
We’re rich, but restive. And we are suddenly strikingly pessimistic: ANU found 30 per cent of us believe our children will have “much worse” lives than our own, compared with 15 per cent in 2008.
That’s not just about global warming – 39 per cent of us think life will be worse in the short term, compared with 14 per cent in 2021.
In today’s Examine: we’re rich, our economy is growing, and we’re near full employment, so why are we so dang upset?
Why are we less satisfied than we were?
The ANU pollsters looked at the underlying variables that most strongly correlate with unhappiness.
The strongest negative predictors: not having completed year 12 or a post-school qualification, and living regionally.
And who is voting for One Nation? George Hasanakos, director of research at pollster DemosAU, told the ABC the party’s support has been spearheaded by older people who don’t have a university degree and are likely to live in regional and rural Australia.
At Flinders University, a team of researchers has been taking a slightly different angle. Rather than just asking about life satisfaction, they have been asking Australians to rank their most pressing challenges.
For people with lower life satisfaction, “that clusters really strongly around cost of living, and around housing affordability”, says Professor Ian Goodwin-Smith, who led the research. “It’s people who are thinking about how to make ends meet who are the most significantly unhappy.”
The strongest positive predictors in ANU’s polling: holding a degree and being 65 or older. But this may simply be two sides of the cost-of-living coin.
“Higher education, and the high social status and income stability that typically accompany it, appear to insulate people from external economic factors,” the report’s authors conclude. “In this sense, those with a degree may be living in a ‘pre-war’ world, less exposed to the uncertainty generated by recent macroeconomic shocks.”
The economy is growing. Unemployment is low. But we are essentially living through the highest period of inflation since the turn of the century; we are running the equal-highest core-inflation rate among major developed economies.
And people really hate inflation. Given the choice, many people will pick low inflation over low unemployment. Higher-than-expected inflation gives people a sense their living standards are degrading right in front of them. Given that, we shouldn’t be surprised at how pessimistic Australians are about the state of the economy, because what matters to most to people is not economic growth or unemployment rates but a sense their weekly budget is shrinking.
A second important point: those who were less well-off to begin with will be hit harder. This is replicated in other studies: people on lower incomes are more upset by higher inflation.
“Overall, we are doing well, but we have pockets of the economy that are feeling the pinch more than others,” says Goodwin-Smith.
Why might people living in the regions be less happy with life than those in the cities?
Regional editor Benjamin Preiss has a great piece wading into the complexity of the issue. A simpler answer might just be income distribution. The ANU’s polling found income is an important predictor of life satisfaction; research by the Grattan Institute in 2017 found a linear negative relationship between income and how far you live from a capital city.
To join the dots: people in the regions have lower average incomes than those in the cities. They are more likely to feel the pinch of inflation. And people hate inflation.
The rise of One Nation
Stefanie Stantcheva’s 2024 study Why Do We Dislike Inflation? reads like a list of populist grievances: inflation gives people a general sense of unfairness, and a specific sense that government, big business and “the system” are to blame.
The evidence suggests a link between rising inflation and rising vote shares for populist parties.
The Kiel Institute studied 365 elections across 18 advanced economies since 1948, looking at the influence of “inflation surprises” (when the inflation rate jumps far higher than predicted).
Their finding: inflation consistently increases vote shares for extremist, anti-system and populist parties.
If you’re a party of government looking nervously over the ramparts at the rising populists, Kiel’s research offers a potential solution. In economies where inflation shocks are accompanied by steep increases in real wages, they don’t see a populist surge.
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Liam Mannix is an investigative journalist at The Age. Before that, he was national science reporter for The Age and the Sydney Morning Herald.
Contact him via email or Signal (encrypted) liammannix.18
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