Australia’s economy grew 2.1% over the past year, and with that came improved household living standards – in part due to income from rooftop solar panels.

But another big driver of economic growth was investment in datacentres, which hinders emissions reductions from renewable energy.

These two facts lead us to the question: is all growth good?

GDP figures are excellent at telling us the size of the economy, but those figures can also hide a lot of what Richard Denniss, the co-executive director of the Australia Institute (where I work), describes as “the shape of the economy”.

A good example of this is that, in the past year, household spending was by far the biggest driver of economic growth.

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About two-thirds of the increase in Australia’s economy came from people spending.

This would seem to be quite good. We are back to spending at pre-Covid-19 levels:

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Great size, how about the shape?

Well, if you were told that more than half (55%) of the increase in household spending during the September quarter was on electricity and gas, health costs and insurance, would that seem so good? Especially given we usually only spend about 17% of our annual income on those items?

We’re spending more on essentials and less on things we can do without.

Shape matters.

And so, before we go any further, I want to remind you of a couple of

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