Submission to Australian Treasury’s Measuring What Matters

Submission to Measuring What Matters

 The Australian government is to be congratulated on its initiative to expand budgetary reporting measures. Focusing traditional reporting on macroeconomic measures such as GDP has been premised on the understanding that a dynamic economy will necessarily lead to high levels of community and individual wellbeing. Researchers such as Pickett and Wilkinson, for example, have challenged this view, emphasising the importance to wellbeing of limiting social inequalities in wealth and income.

I therefore strongly support the following statement in Budget Paper 1 Statement 4 at page 123:

…the central challenge of progress reporting is bringing attention to the broader factors that underpin community well-being and longer-term economic prosperity…

Indeed, the very notion of ‘progress’ needs to be considered anew. Our society is facing significant challenges this century due to multiple environmental threats, of which climate change is just one. The 2021 State of the Environment report conveyed the growing consensus amongst scientists that:

Environmental degradation is now considered a threat to humanity, which could bring about societal collapses with long-lasting and severe consequences.

Environmental degradation is largely driven by consumption. Over the last century, resource and energy consumption have closely tracked GDP, so GDP can also be considered a rough indicator of environmental damage. Ecological footprint analysis suggests that humanity is already consuming and polluting annually at about 1.7 times the rate that natural systems can regenerate and remediate. Ecological economists such as Professor Robert Costanza argue that much economic growth over recent decades has been ‘uneconomic’, in that it has been achieved through the liquidation of natural capital that has been inadequately accounted. In the longer-term, community wellbeing will not be improved or even maintained by simply optimising traditional macroeconomic indicators. We must also track environmental health.

I therefore recommend that the choice of measures sit within a coherent conceptual framework with strong program logic. In particular, the indicators should reflect that a healthy natural environment is not merely of aesthetic and recreational importance, nor even just of fundamental importance to industries such as agriculture and tourism. Rather, as has long been understood by First Nations peoples, a healthy environment is critical to broader human wellbeing and the sustainability of our societies.  As we enter the sixth great global extinction event, it also behoves us to accord nature an ongoing right to exist, independent of its values to humanity.

The most significant challenge in the choice of environmental indicators is reflecting the extraordinary complexity of natural systems. The measures must go beyond simple accounts of natural resources. Taking an ecosystem services approach would provide one useful framework.

Similarly, the Planetary Boundaries framework developed by the Stockholm Resilience Centre could summarise the levels of some significant environmental threats. Researchers have recently used the framework to determine how Australia is placed relative to these ‘boundaries’.

The health of the natural environment and its capacity to support human society goes beyond the presence or absence of discrete material entities, such as individual species. The environment is best considered as highly complex systems and processes. Treasury would do well to seek the advice of expert natural environment scientists as how best to measure the health of these aspects.

Unfortunately, Australia’s has poorly resourced environmental data collection; we currently do not have a comprehensive system for monitoring of environmental health. This contrasts with the situation for national collection of data for weather and climate, earth science, and demographic and economic measures. This need has been identified in Australian government reports over the years, including the 2021 National Research Infrastructure Roadmap. This gap will need to be addressed if Australia is to adequately monitor our environmental health, including its capacity to sustainably support high levels of community wellbeing.

I would be pleased to expand further on the matters raised in this submission. I can be contacted on 0415 253 684.

Yours sincerely

Jonathan Miller


8 January 2023

 About the author

I am a trained ecologist and have worked for the Australian and ACT governments on environmental and economic policy, as well as a parliamentary advisor. I now work independently to promote the need for the development of environmentally-sustainable and socially-just. I have established Steady State ACT as a vehicle for this work.

Review of Herman Daly’s Economics for a Full World: His Life and Ideas

Sadly, the key developer of the Steady State Economy model, Herman Daly, died on 28 October 2022.

Leading fellow ecological economist, Peter Victor, released his biography of Herman Daly earlier this year.  My review of this book appeared in the November 2022 Sustainable Population Australia newsletter (see page 5).

Alternatively, full text follows:

Book Review

Herman Daly’s Economics for a Full World: His Life and Ideas

by Peter Victor
Earthscan from Routledge, 2022. 300 pp. Soft copy RRP $73.99 (discounts available online)

ISBN: 978-0-367-55695-2

Reviewed by Jonathan Miller


Neoclassical economics is the dominant language of politicians and the media, and ongoing economic growth is the pre-eminent goal of nearly every nation. Yet, this is taking humanity to the brink of disaster at exactly the time we need prominent voices emphasising the dependence of our societies on a healthy environment. Peter Victor biography, Herman Daly’s Economics for a Full World: His Life and Idea, is therefore timely.  Herman Daly stands out for developing models that place economics within its environmental context. He is best known as a founder of ecological economics and for proposing principles for a steady state economy.

Victor’s early chapters describe Daly’s childhood and professional life and the major influences on his thinking. Victor is not a professional writer, however, and these sections sometimes feel pedestrian. What emerges, nonetheless, is a picture of Daly as a humble man of high integrity, strongly influenced by his Christian faith and his encounters with those less fortunate.

The majority of the book is devoted to Daly’s ideas and his intellectual engagement with critics and supporters. Victor’s writing is stronger here, reflecting his standing as another highly-respected ecological economist. Given his strong friendship with Daly, it is unsurprising that Victor provides a generally sympathetic assessment of Daly’s arguments. This book, however, is not a hagiography and also identifies shortcomings in Daly’s work.

The biography includes a chapter on population and migration. Daly apparently believes that “more people…are better than fewer, but only if they are not all alive at the same time!” In his earlier formulations of the steady-state economy, he prescribed a stable population, but he later relaxed this requirement so long as resource throughput were relatively constant. Daly’s early population concerns were informed by his work in north-eastern Brazil, where he observed that contraception was readily available to the wealthier entrepreneurial class, but not to the labouring poor. While not a Marxist, Daly saw the denial of contraception to the poor as exploitative, providing an expanding pool of underpaid workers for capital. Daly argued that slowing population growth was critical to improving living standards for the poor.

Some of Daly’s other population perspectives were controversial and decidedly politically incorrect. Borrowing from the environmental economic ‘cap and trade’ model, Daly proposed that adults be given transferable birth licences. Daly foresaw the problems with enforcement, but strangely seems not to have engaged with broader societal views and taboos on having children.

Daly also developed a stance on immigration. While he supported continuing ‘legal’ migration into the USA, he favoured controlling borders and ending illegal immigration. His motivation, however, was not nationalistic but rather a concern for American labour standards. He saw illegal immigration as again serving employers by creating a pool of cheap labour, thereby weakening unions, decreasing wages and increasing profits. Daly’s support for substantial migration levels was partly to provide a generous quota for refugees, especially for those fleeing the consequences of American military and political interventions. Daly’s views on immigration accord with his desire to roll back globalisation.

Victor also includes chapters on Daly’s positions on economic scale, distribution and allocation; measuring the economy; the steady-state economy; money and banking; and globalisation, internationalisation and free trade. These topics may sound dull to non-economists but Victor’s treatment makes clear why they are of critical importance to sustainability advocates. The chapter on economic growth provides very useful global data on the rapid expansion over the last century of the use of natural resources and the generation of wastes.

In his work across these subjects, Daly has faced criticism both from natural allies and from the economic establishment. Marxists have criticised Daly’s steady-state proposals for using free market, capitalist mechanisms. Victor gives special attention to Daly’s frustrating relationship with his brilliant but fickle teacher and mentor, Nicolas Georgescu-Roegen. Daly’s most difficult dealings were not surprisingly with leading neoclassical economists and he would pay a high professional price for challenging the academic status quo. Daly’s work highlights fundamental problems with neoclassical economics, particularly its flawed consideration of the natural environment.

Victor’s biography is relatively light on economic jargon and includes few mathematical formulae. It will, however, best suit those who have a basic understanding of economic terms and theories. This book and ‘Sustainability and the New Economics’ by SPA’s Stephen Williams and Rod Taylor are excellent primers for those wanting to understand how economics should operate in a full world.



Interview of GDP with 2XX

I spoke to Scotty Foster and Zina Richardson from 2XX on their program, Behind the Lines, on Friday 7 October.  Our discussion was wide-ranging across limits to growth and economic issues and models, including the Steady State economy. The program runs for 90 minutes.

The link to the podcast may not be available after early November:

Behind The Lines


What is a sustainable economy?

This article appeared in a number of ACM publications on Sunday 4 September 2022:


What is a sustainable economy?


Humans are like all other animals – we depend on our habitat to meet our needs. In this increasingly connected world, our habitat is the global environment, including the land, seas and atmosphere.

Scientists warn, however, that we are degrading our environment so much that it threatens our very livelihoods. Each year people, particularly in wealthy countries, use far more resources than Earth can regenerate, and polluting more than nature can remediate.

So, it is important to move to a sustainable economy, but what does that look like?

‘Sustainable’ is a word that is often used loosely to describe products that reduce environmental damage. A truly sustainable economy, however, would return our total annual resource use and wastes to within nature’s capacities. It also must be socially sustainable.

A number of sustainable economy models have been proposed.

First, there is the circular economy, which rejects the linear path from resource to product to disposal. Instead, it aims to minimise waste and maximise the re-use of resources, particularly through recycling, as well as regenerating nature.

Better use of resources is vital, but the circular economy is constrained by the properties of many resources, which allow recycling only a limited number of times. Additionally, so long as the physical economy is growing, the volumes of materials in use at any time increases, creating further demands for resource extraction and energy use.

Another proposal is ‘green growth’, which shifts production from damaging extractive and polluting industries towards cleaner production, using resources more efficiently.

It relies, however, on long-term decoupling of GDP growth from resource use, which is almost certainly impossible. The United Nations Environment Program no longer promotes ‘green growth’.

Social justice and environmental sustainability underlie a suite of other models. Kate Raworth’s ‘Doughnut Economy’ argues our economy should ensure all people have a decent standard of living, while staying within planetary boundaries.

The degrowth movement advocates radical change beyond capping or reducing the size of the economy, including reducing inequality, guaranteeing everyone an income, increasing investment in public goods and moving away from consumerism and advertising.

The steady state economy shares some degrowth elements, focusing on keeping the physical size of the economy within ecological limits, and social justice.

Its principal tenets are roughly constant economic throughput of resources, stable population size and an equitable distribution of economic benefits. Non-renewable resources should only be extracted at the rate that substitutes can be found.

What emerges from these models is the need to transition to an equitable, post-consumer economy, emphasising strong communities and a respectful relationship with nature. These societies would not be static; even in the absence of economic growth, technical innovation and cultural development would continue.


Jonathan Miller

Steady State ACT


Unlimited growth cannot be sustained

This article appeared as an opinion piece on page 45 of the Canberra Times on Saturday 3 September 2022:

The national State of the Environment report shocked us, detailing environmental degradation across Australia’s ecosystems.

While Labor has blamed the Coalition for a decade of neglect, our predicament is over two hundred years in the making. In the past, our environment has run a poor second to the economy, being seen as largely a sentimental issue of beautiful landscapes and cute, furry mammals.

In contrast, the most important message from the State of the Environment report is that the wellbeing of Australians is critically dependent on a healthy environment. This has been amply demonstrated by the impacts of recent bushfires, floods, and the Covid pandemic.

In this vein, the State of the Environment report made a chilling warning: “Environmental degradation is now considered a threat to humanity, which could bring about societal collapses with long-lasting and severe consequences.”

This statement is striking because it is delivered by cautious scientists in a government report. It also eerily echoes a warning to humanity from many years earlier.

In 1972, the Club of Rome released the report, Limits to Growth. Limits to Growth used a systems approach to model future outcomes for five global variables: non-renewable resources, industrial output, food, population and pollution. It ran projections for nine scenarios, but the Standard Run scenario received the most attention, because it assumed continuation of existing policies – especially ongoing growth in consumption. The Standard Run found that industrial and food production would peak in the first half of this century and then steadily drop off, leading to global population decline.

The key messages from Limits to Growth were that global material consumption could not increase indefinitely; once sustainable limits are exceeded, contraction is inevitable. The authors, however, were clear that disaster could be avoided if economic policy changes were made quickly.

Industry and economists criticised the report vociferously, often either misunderstanding or wilfully misrepresenting it. Their responses were very similar to those by more recent climate deniers. Yet, the Standard Run scenario might well be the most accurate macroeconomic projection ever.

In 2008, CSIRO’s Graham Turner found that the Standard Run had closely matched historical data over three decades. In 2020, Gaya Herrington from KPMG US found the Standard Run was still on track and projected that economic growth would peak around 2040 and then collapse.

These projections should not be surprising. Since 1968, when Apollo 8 beamed back photos of Earth from space, we have been able to see clearly the finite nature of our beautiful planetary home.
While in theory GDP growth can continue indefinitely through productivity improvements, there are clear physical limitations. Agricultural yields are constrained by biology and even the shrinking of computer chips is running into limits due to the size of atoms.

In practice, global GDP remains strongly linked to the volume of physical resources used, and there is no evidence for believing the two can be decoupled long-term. The lessons from Limits to Growth are critical to understanding our current global environmental predicament.

Climate change needs to be seen as just one example of the problems caused by humanity exceeding Earth’s capacity to self-repair. Others include freshwater pollution, degradation of soils, overfishing and the rapid extinction of plant and animal species.

Understanding Limits to Growth also leads us to look beyond the immediate causes of environmental degradation, such as land clearing and the burning of coal. We need to identify and address the drivers of these activities, particularly society’s dominant mental frames.

For example, our prevailing modernist perspective is that humanity is no longer bound by nature’s constraints. Neoclassical economics also teaches us that the environment is primarily a resource for use in economic production. Perhaps most importantly, governments worldwide have economic growth as their foremost policy goal.

The Labor party’s proposed changes to environment legislation and establishment of an Environmental Protection Agency are important steps to turning around our environmental decline, but are not sufficient. The government’s introduction of a wellbeing budget hints at more important and fundamental required changes. We need to move away from our fixation with economic growth if we are to reach a sustainable settlement with our magnificent but fragile Australian natural environment that sustains us. It is time to finally heed the message of Limits to Growth.


Jonathan Miller


Steady State ACT

Short bio
Jonathan Miller is an ecologist who has worked on environment and economic policy in the Australian and ACT governments, and as a parliamentary advisor. He has managed national programs for threatened species and invasive species.


Are we beyond limits to economic growth?

The following article was published in a range of ACM newspapers on 15 August 2022, under the Fuzzy Logic column.

Are we beyond limits to economic growth?


Increasing gross domestic product (GDP) is seen as the highest goal for nearly every country. Economic growth is seen as the way to make society more prosperous. But can an economy grow indefinitely? If there are limits, have we already passed them?

Fifty years ago, the Club of Rome released its report, Limits to Growth. It found that if economic growth continued, global population and industrial production would peak and then decline in the first half of this century. This was due mainly to pollution and the decreasing abundance and quality of minerals.

Many criticised the report, but studies in the last decade have found that actual outcomes have closely followed the Limits to Growth modelling. The Club of Rome was considering limits to the amounts of resources used, but there is a very close relationship between this and GDP. While economists propose decoupling economic growth from resource use and pollution by increasing productivity, it is unlikely this can be done long-term.

There is strong evidence that global economic activity is already unsustainable. Humans are extracting more resources than the Earth can regenerate and creating more pollution than our planet can treat.

Earth Overshoot Day marks the day when humanity has used all the biological resources that nature regenerates each year. This year, that day was 28 July and the date is arriving steadily earlier every year. After that day, we are eating into natural capital.

This degradation of nature is not only causing climate change but also extinction of animals and plants, soil loss, shortage of clean freshwater and overfishing. Limits to Growth warned that the economy can overshoot Earth’s capacities for a while, but this must eventually lead to economic decline.

Our modern lifestyles can make it seem that environmental degradation is unfortunate but necessary for progress. The recent Federal State of the Environment report, however, made it clear that the wellbeing of Australians is dependent on a healthy environment. Recent extreme bushfires, floods and Covid provide stark reminders.

The State of the Environment report went further to warn that environmental degradation threatens humanity and could cause societal collapse – echoing Limits to Growth.

The good news is that the Club of Rome said clearly that it was possible to change path and avoid disaster.

This remains true today, but we must act quickly. A number of countries are now moving from an economic growth priority towards ‘wellbeing economies’. They are prioritising environmental protection, education, health and reducing poverty and inequality.

Jonathan Miller, Steady State ACT.