Wellbeing factors, including educational attainment and living standard goals, will form part of the federal budget later this year.
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Changes to the main outlook of Australia's fiscal policy comes amid renewed calls for a review of the Reserve Bank and its existing governance structure following accusations the bank miscommunicated its guidance on interest rate hikes.
In a speech to the Australia New Zealand Leadership Forum on Friday, Treasurer Jim Chalmers is poised to outline a raft of additional measures to sit alongside existing economic indicators in the upcoming October budget.
To include wellbeing into the budget follows similar moves made by the ACT government in 2020 which implemented a wellbeing component within its territory budget outcomes.
New Zealand also includes wellbeing factors into its budget.
Dr Chalmers said budget markers need to be broader and take into account health, social and living outcomes.
"At a time of record debt and budget pressures and cost of living pressures, value for money is essential and we judge it by what it means for the right kind of growth, including sustainable incomes growth," an excerpt of Dr Chalmers speech reads.
"I've asked Treasury to make measuring what matters, and an Australian approach to wellbeing, a focus of the budget in October.
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"Because whether it's inflation, wages growth, wellbeing or climate change, we are stronger and more effective when we stand together and work together in uncertain times."
ANU economist Andrew McKibben flagged reviews in the RBA needed to look at if the bank's current structure is able to factor rising climate risks and its impact on future economic outcomes.
Dr Chalmers intends to dedicate budget statement four to wellbeing and will likely look at factors such as human development, income outcomes, liveability, and health. Education standards will also be included.
The shake-up to the budget has coincided in the same week the Treasurer outlined rising interest rate hikes for a third consecutive month would force borrowers more to cough up money to cover their loans.
The RBA hiked the cash rate by 50 basis points to 1.35 per cent, with expectations the cash rate will hit 3 per cent by December.
Dr Chalmers has previously outlined the objective of the RBA review would be to scrutinise if existing monetary policy settings are adequate.
"My objective with this review of the Reserve Bank is not to take shots at the Bank or to take shots at the Governor," he said on ABC Insiders in June.
"But to make sure that we've got the right monetary policy settings, that we're drawing on best practice from around the world, and we're taking the opportunity to learn the lessons from periods of volatility in monetary policy and periods of stability in monetary policy, to make sure that we've got the best set of arrangements."
