Nearly 2.2 million Australians aged 15 and older are now living below the wellbeing poverty line, with the proportion of people reporting very low life satisfaction doubling over the past decade, according to Guardian Australia’s analysis of the Australian Bureau of Statistics (ABS) General Social Survey.
In 2025, 9.7% of Australians—approximately one in 10—rated their general life satisfaction at four or below out of 10, a sharp increase from the 4.8% recorded in 2014.
The upward trend in life dissatisfaction began during the 2020 pandemic lockdowns and has persisted amid mounting economic pressures, particularly soaring living costs.
The ABS data aligns with other surveys, such as Westpac’s consumer confidence index, which has remained at near 50-year lows since the pandemic’s impact.
Individuals scoring four or below on life satisfaction are more likely to report feelings of alienation, disengagement from their communities, and reduced support for multiculturalism, according to ABS findings.
Only 15% of those experiencing wellbeing poverty feel they have a voice in their community, compared to the national average of 32%. This rises to 46% among those reporting high life satisfaction (scores of nine or above).
Over 60% of low-satisfaction respondents agree that a multicultural society is beneficial, a stark contrast to the 80% national average and nearly 90% among the happiest Australians.
Stagnation and Stagflation
Household disposable income, adjusted for inflation, remains stagnant at mid-2020 levels, with no immediate recovery in sight.
Economists forecast a potential per capita recession amid stagflationary pressures of low growth and high inflation, disproportionately affecting lower-income households.
AMP’s chief economist, Shane Oliver, highlighted that essential costs—including electricity, insurance, and healthcare—have surge for low-income families, exacerbating financial strain.
“Consumer confidence remains chronically weak, stuck near recessionary thresholds,” Oliver said.
Guardian Australia previously reported that wages for high earners have grown at over twice the pace of those at the bottom over the past decade.
Oliver emphasized that life satisfaction does not increase indefinitely with wealth beyond a middle-income benchmark, per established economic research on happiness.
He attributed recent declines in life satisfaction to dashed hopes, particularly around homeownership, which he cites as a root cause of growing discontent.
“Housing policy failures are the biggest driver here. Addressing this could significantly alleviate the crisis,” Oliver stated.
Anthea Hancocks, CEO of the Scanlon Foundation Research Institute, noted that economic hardship erodes social cohesion by diminishing self-worth and trust in institutions.
“Feeling ignored or undervalued breeds distrust, leading to community withdrawal,” Hancocks explained.
She added that social media intensifies perceptions of societal disconnect, though national social cohesion has remained resilient at 78 on Scanlon’s index, down from a 2021 peak of 92.
Hancocks stressed that neighborly and community engagement boosts life satisfaction, regardless of income levels. “In cohesive neighborhoods, happiness doubles,” she said. “While this won’t solve all issues, fostering trust and national pride is essential.”
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