Prosperity was once framed as a simple equation: work hard, earn more, live better. But amid rising housing costs, higher grocery bills, growing financial insecurity and increasing social fragmentation, that definition has aged poorly.
Today, prosperity is about more than income alone. It is about whether people feel secure, connected, capable and optimistic about the future.
At CEDA, our Progress 2050 vision frames prosperity as the realisation of both economic and social goals. That means strong economic performance must go hand in hand with opportunity, trust, inclusion and wellbeing – what we call Australia’s social compact. One without the other is ultimately unsustainable.
Sustainable prosperity requires competitive businesses, productive investment and a skilled workforce. But it also requires opportunity, inclusion, wellbeing and trust. Without those foundations, growth becomes narrower, politics becomes more brittle, and too many Australians are left outside the economy’s promise.
Philanthropy helps build those foundations.
Australians are redefining prosperity
Traditional measures of prosperity have focused heavily on financial outcomes. But people’s experiences of economic security are shaped by more than income alone. Confidence about the future, social connection, stability, health and a sense of agency all influence how Australians experience prosperity in practice. In that sense, prosperity is increasingly understood not just as what people earn, but as whether they are able to live well, feel secure and participate fully in society.
Australians are living this reality now. After some progress last year, cost of living pressures have markedly resurfaced, with headline inflation surging to 4.6 per cent in the year to March. Combined with the effects of rising interest rates, this is expected to see Australians’ real household disposable income grow at an anaemic 0.5 per cent in the next financial year.
The pressure is not only financial. AIHW analysis of HILDA data shows Australians experiencing financial stress were 2.5 times more likely to report poor mental health than those not under financial stress. At the same time, 15 per cent of Australians reported experiencing loneliness or social isolation.
Sustained financial pressure also changes how people make decisions. When households are focused on meeting immediate costs, longer-term planning becomes harder. Saving, retraining, investing in health or participating in community life can all fall away when everyday pressures dominate attention. CEDA research has shown that the rate of work-related training in the economy has fallen, with rising workloads a key driver of the decline.
This matters because prosperity cannot be measured solely through GDP growth or wage increases. Economic indicators remain essential guideposts, but they do not fully capture whether people feel secure, connected or optimistic about their future.
Prosperity depends on both economic and social foundations
A prosperous society creates the conditions for people to participate fully in economic and civic life.
That includes secure employment, affordable housing and quality education. But it also includes social trust, community connection, access to healthcare, institutional confidence and the ability to live with dignity.
Importantly, these factors reinforce one another.
Social and economic outcomes are deeply interconnected. OECD work suggests that trust and social cohesion matter for resilience: communities with strong social cohesion recover better from disruption, and negative shocks to trust can have lasting effects on co-operation even after economic recovery. At an organisational level, psychologically safe workplaces are associated with stronger collaboration and innovation. Higher-trust economies benefit from lower transaction and enforcement costs, stronger institutional legitimacy, and better long-term economic performance
Australia’s challenge over the coming decades is not simply to grow the economy, but to ensure growth translates into broad-based opportunity and reinforces social cohesion instead of eroding it.
A more complete vision of progress
Economic growth remains essential. But growth alone is not enough if Australians feel isolated, anxious or left behind.
The goal should not simply be a wealthier Australia, but a more confident, connected and resilient one.
As Australia looks toward 2050, the conversation about prosperity is evolving. Economic growth remains essential, but Australians are increasingly asking a broader question: whether growth is translating into security, opportunity, connection and confidence about the future.
Understanding prosperity through that wider lens does not diminish the importance of economic performance. It recognises that long-term national success depends on the relationship between economic strength and social wellbeing, not a choice between the two.