“As another financial year begins, the national conversation should move beyond the assumption that bigger is always better.” CLIVE WILLIAMS says the question is not how to make the economy bigger, but how to make Australians better off.

As another financial year begins, Australians will again be told that economic growth, population growth through migration, more housing construction, greater consumption, and higher government revenue are the keys to our brighter future.

Economists and politicians often speak as though a larger economy is automatically a better one – as though more people, more buildings and more activity must mean national progress and higher living standards.

However, for Australia this obsession with quantitative growth has become a liability. The real question is not how to make the economy bigger, but how to make Australians better off. By that measure, the case for endless growth is far weaker than its advocates claim.

Recent experience illustrates the problem. GDP may rise, but when the population grows almost as quickly, living standards per person stagnate.

Politicians celebrate economic expansion, while ordinary Australians face unaffordable housing, longer commutes, crowded hospitals, overstretched schools and declining confidence that their children will enjoy the same opportunities as they did.

That is not progress. It is expansion without improvement.

Housing provides the clearest example. Rapid population growth adds demand faster than supply can respond, producing not shared prosperity but intergenerational inequality.

Existing homeowners may benefit from rising values, while younger Australians confront impossible mortgages or lifelong renting. A nation that cannot house its citizens affordably should be cautious about celebrating growth.

Infrastructure tells a similar story. Every additional million people requires more roads, rail, hospitals, schools, water and energy. Yet governments too often approve growth first and struggle to provide the supporting infrastructure later. Congestion increases, services come under strain and quality of life gradually declines.

Australia also faces physical limits that economic rhetoric often ignores. Although geographically vast, much of the continent is arid and environmentally fragile.

Most Australians live within 50 kilometres of the coast, where land, water and infrastructure are already under pressure. Endless population and consumption growth inevitably place further stress on farmland, biodiversity, water security and urban liveability.

This does not mean rejecting economic development. It means distinguishing between quantitative growth and qualitative sustainment.

Quantitative growth asks: How do we make the economy bigger?

Qualitative sustainment asks: How do we make Australians better off?

The latter prioritises productivity, innovation, education, health, housing affordability, environmental resilience and rising living standards per person. The quality of economic activity matters more than its sheer volume. A modest increase in GDP is more valuable if it delivers higher real wages, better public services, affordable housing, and a healthier environment.

A mature economy should not rely on population growth to conceal weak productivity. When businesses can expand simply by adding more workers and customers, the incentive to invest in technology, skills and efficiency diminishes. Australia needs a smarter economy, not simply a larger one.

Governments, meanwhile, have their own incentives to favour growth. More people generate more tax revenue, more GST, more stamp duty, and higher land values. That may strengthen government finances, but public policy should ultimately be judged by outcomes per person, not by the size of the aggregate economy.

The better model for Australia is durable national wellbeing. That means asking tougher questions. Can young Australians afford homes? Are real wages rising? Are hospitals and schools improving? Is infrastructure keeping pace? Are cities becoming more liveable? Is productivity increasing? Are our natural systems being protected?

These are more meaningful measures of success than GDP alone.

Australia does not need a bigger economy at any cost. It needs to become more productive, resilient, liveable and fair.

Growth that genuinely improves living standards is welcome. Growth that merely inflates GDP while worsening housing affordability, increasing social inequality, and degrading the environment is not progress.

As another financial year begins, the national conversation should move beyond the assumption that bigger is always better.

For a country with finite land, water, infrastructure and social capacity, qualitative sustainment is not anti-growth. It is the kind of growth that makes sense.

Canberra illustrates the point. When I arrived at the Australian National University, it was said half-seriously that economists rarely needed to change their examination questions because every year the answers changed.

Four decades later, Canberra is far larger by almost every measure. Yet many long-term residents, me included, would argue that it was a far more liveable city a generation ago. Our lived experience may well reflect a broader Australian reality.

Prof Clive Williams MG has lived in Canberra since 1980.

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