In 2022, Australia's subjective wellbeing declined across all measures, marking the first time in more than a decade that such a consistent downward trend had been tracked, according to the Wellbeing Index Report.

Deakin University research fellow and the review's lead author Dr Kate Lycett said the result was unsurprising.

"Given the tumultuous global and local events of 2022, including catastrophic floods, soaring COVID-19 cases and global unrest causing inflation to skyrocket, the downward trend of Australians' wellbeing was unsurprising.

"But what is surprising is that we didn't see this decline earlier," she said.

"We can learn a lot from other countries. Nordic countries have some of the highest rates of subjective wellbeing globally because they have policies that are focused on equity and wellbeing."

The report found 18 to 25-year-olds and low-income households recorded the lowest wellbeing scores.

The survey was conducted in May and June 2022, which the authors note, was a time when inflation was exceeding 6 per cent and the Reserve Bank had delivered the first two of eleven interest rates rises to May 2023.

At the time Australians tackled natural disasters, a global pandemic and disruptions associated with the war in Ukraine.

The findings come as the federal budget provided a suite of measures targeting cost-of-living relief and mental health.

But this increase won't be enough to offset the scale of poverty and financial pressure facing Australians on welfare payments, says Australian Council of Social Services CEO Dr Cassandra Goldie.

"The real increases to base rates of JobSeeker, Youth Allowance and Rent Assistance will still leave more than one million people in poverty, unable to afford three meals a day and a roof over their head," she said.

"Whilst every dollar counts, the $20 a week increase to JobSeeker and related payments is well below the Economic Inclusion Advisory Committee's finding that it needs to rise by at least $128 a week to ensure people can cover the basics."

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The Wellbeing Index report found that young adults recorded the highest level of mental distress and climate anxiety.

Young adults were more worried about climate change compared to those aged over 76 years. However, young adults also expressed the more optimistic perspectives on the ability for climate change to be dealt with.

"Putting young people at the heart of policy decisions and their wellbeing at the heart of those policies is going to be beneficial for everyone," Dr Lycett said.