Australia's life dissatisfaction levels double as wellbeing poverty reaches new highs

Nearly 2.2 million Australians aged 15 and over are experiencing significant unhappiness. The number of people who are very unsatisfied with their lives has doubled in the last ten years.

According to an analysis of Australian Bureau of Statistics data from 2025, about 9.7% of Australians, or roughly one in ten people, rated their overall life satisfaction as four or lower out of ten. This indicates a state of 'wellbeing poverty'.

This situation is a significant increase compared to 2014, when only 4.8% of Australians, or one in twenty people, reported very low life satisfaction. The problem became much worse during the Covid lockdowns in 2020 and has continued due to the rising cost of living.

The Australian Bureau of Statistics data matches findings from other surveys, like the Westpac consumer confidence index, which has remained at very low levels for about 50 years since the pandemic.

The data also suggests that people experiencing wellbeing poverty are more likely to feel disconnected and powerless in their communities. They also tend to show less support for multiculturalism. In contrast, those with the highest life satisfaction are much more likely to feel they have a voice in their community.

National living standards, measured by household income adjusted for inflation, have not improved since mid-2020. Experts predict that the Australian economy may face a per capita recession, with low growth and high inflation, a situation known as stagflation.

Economists point out that lower-income families have been especially affected by sharp increases in essential costs like electricity, insurance, and healthcare. Consumer confidence remains at levels usually seen during recessions.

Previous research has shown that the highest-paid workers have seen their wages grow much faster than those earning the least over the last decade. Economists also note that beyond a certain middle-income level, more money does not necessarily lead to greater life satisfaction.

One economist suggested that the drop in life satisfaction is likely due to people's hopes being disappointed and expectations not being met, especially concerning the difficulty of owning a home. He believes that addressing the housing issue would significantly help improve the situation.

The chief executive of the Scanlon Foundation Research Institute, which studies social cohesion, explained that people's financial situations greatly affect their self-worth and how they feel about society. If people feel ignored or unimportant, they may not trust others or institutions, leading to less community involvement.

While financial pressures and dissatisfaction are growing, national social cohesion has remained relatively stable in recent years. However, it is lower than its peak in 2021. Experts emphasize that connecting people to their neighbours and communities is crucial for improving life satisfaction.

They state that even for those facing financial difficulties, living in a highly cohesive neighbourhood can double their level of happiness. Building trust and a sense of national pride are seen as fundamental elements that can help people feel supported.