Ecologically Sustainable Development

Are We Sustaining Australia? Report Against Headline Sustainabilty Indicators

Environment Australia, 2002
ISBN 0 642 54771 8

Value 7: Economic Security

Rationale for inclusion of issue

Economic security is the capacity of the economy to remain strong over time.

Indicator 9

Rationale for selection of indicators

In the national and sectoral balance sheets, Net Worth represents the difference between the stock of assets (both financial and non-financial) and the stock of liabilities (including shares and other equity). More generally, Net Worth is defined as total assets less total liabilities (including shares). This indicator gives an overall assessment of Australia's stock of economic wealth, including elements as diverse as farm inventories, dwellings and computer software. It provides for valuation of the productive value of natural and other resources, and therefore aggregates economic values which may otherwise require coverage by separate indicators.

Explanatory and elaborative information

Australia's net worth grew by 49.5% in current prices between 30 June 1992 and 30 June 2000, compared with an increase of 12.7% in real/volume terms (ABS Unpublished data). This represents a real average annual growth rate of 1.5%. Real/volume estimates remove the effect of price changes, and allow comparisons of changes in the value of Australia's net worth over time, free of direct effects of inflation.

Source: ABS Cat No. 5241.0.40.001

Supplementary indicators

• historical volatility of national output
• industrial balance or over-concentration
• national savings/investment imbalance
• strategic reliance on foreign supplies
• exposure to foreign debt