New Zealand has a wellness budget and the man behind it says it proves budgets aren’t just about finances
When Grant Robertson meets his counterparts at world events, he is regularly asked about wellness.
Not his own welfare, but the welfare of his whole country.
“I suspect it’s in the talking points,” he laughs.
“There is a real interest in that.
Mr. Robertson is Deputy Prime Minister Jacinda Ardern and New Zealand’s Finance Minister.
Among economists and those who study public policy, he is known for presenting a “well-being” budget in 2019, declaring that the success of the economy under his leadership would be measured by more than traditional indicators like productivity and the growth.
This approach is based on a simple idea: a country’s financial prosperity alone is not a sufficiently accurate measure of the quality of life of its citizens.
“Traditionally, budgets have primarily looked at the financial results of decisions made by governments and they are extremely important,” he told the ABC.
“But it’s not the alpha and omega.”
Its well-being budget has been drawn up with reference to around sixty standard of living indicators and the government has five “well-being objectives”.
They include commitments to reduce child poverty, help workers transition to a low-emission economy, improve the physical and mental health of New Zealanders and improve outcomes for Maori.
Mr Robertson says the aim is to ‘provide a much richer picture of what success really is’ and make a budget more relevant to New Zealanders.
“There are a lot of numbers and charts and definitions and acronyms that come with money management, and they don’t always mean a lot to people,” he said.
“But I think [the wellbeing concept] makes it more real.”
“If we don’t have a population that feels good, healthy and happy, they will be less productive.”
How far has New Zealand’s approach gone?
But it is not yet known how much of an overall difference the “well-being” budget approach has made.
Some measures don’t seem to have budged much, while others seem to have gotten worse, although the COVID-19 pandemic certainly hasn’t helped matters.
“I think the way it was rolled out was a bit of a marketing gimmick,” said Arthur Grimes, the former chairman of the Reserve Bank of New Zealand.
“I’m a big fan of well-being metrics, but you need explicit targets. We haven’t done that, so what’s been achieved and what hasn’t been achieved in a lot of areas isn’t is not entirely clear.”
“The approach to wellbeing in New Zealand is quite vague. For that to work, I think you need better goals.”
The deputy prime minister says he disagrees with some of the criticism his government has faced and says progress on tough goals will simply take a long time to achieve.
“We have lifted around 66,000 children out of poverty over the past few years, so we can say yes, this measure is something we have achieved,” Robertson added.
“Likewise, the world can step in and COVID came along and it disrupted a lot of what we wanted to do.”
Measuring well-being is not a new idea
The idea of measuring the link between well-being and government spending is neither new nor unique to New Zealand, although the country grabbed headlines in 2019.
The concept has been discussed and tried out in various ways, including places like Scotland and Wales.
Australia’s Treasury developed its own wellbeing framework in 2004 – although it was scrapped in 2016 – former UK Prime Minister David Cameron spoke about the approach when in office, as did the former French President Nicolas Sarkozy.
“Australia was arguably a world leader in this,” Grimes said.
“Every budget since at least 1900 has focused on well-being. Governments spend huge amounts on things like health, education, and well-being. Well-being is just synonymous with well-being. “
Proponents of a specific approach to well-being in government policy argue that it can provide a more targeted way to address long-term problems in a society and ultimately be good for budgets to come. long term.
For example, if children are lifted out of poverty and have access to a good education, it is assumed that they will contribute more to the economy through work, innovation and taxes later in life.
“This approach is an opportunity,” said Professor Michael Mintrom of Monash University.
“He treats policies as investments.”
“In terms of the wellbeing of the nation as a whole, a focus on early intervention is absolutely critical.”
However, opponents argue that economic indicators, particularly inflation, growth and unemployment, will remain the primary determinants of societal well-being, especially as the global economy faces choppy waters and the cost of living is skyrocketing.
Tuesday’s Australian budget will feature a welfare chapter
Australia’s new treasurer, Jim Chalmers, has had an interest in wellbeing budgeting for some time.
He describes Mr Robertson – another Labor (Labour in New Zealand) politician – as a “big guy” and has spoken to him several times about how a similar concept could be implemented in Australia.
The Albanian government’s first economic plan on Tuesday will not feature explicit welfare targets, although they appear likely to be introduced next May.
But the budget books will have a section dedicated to discussing the kind of measures that might work here. For example, the state of the environment or access to childcare services.
“The October budget is the start of this important discussion – it explores international best practices and how best to apply them here at home,” Chalmers said.
“It’s critical that we measure what matters as a country, to help us track and progress on our national priorities.”
“The wellbeing budget is about how we can add to our traditional economic indicators, not replace them.”
The former treasurer mocked the concept of well-being
Jim Chalmers is well aware that his opponents might try to portray the focus on wellness as disconnected nonsense at a time when more and more families are grappling with the rising cost of food, fuel, healthcare and housing.
His predecessor, Josh Frydenberg, who lost his seat in May, notably scoffed at the concept of a wellness budget in 2020.
Speaking in Parliament, Mr Frydenberg claimed it could involve meditation mats, incense, beads and Mr Chalmers walking barefoot around the chamber.
“Kisses to all,” Mr. Frydenberg joked.
The Morrison government left office with huge projected debt and a budget in structural deficit, in part due to massive spending programs aimed at getting Australia through the pandemic.
The new coalition’s Treasury spokesman, Angus Taylor, didn’t scoff at the idea of a welfare budget when asked about the CBA’s proposal.
However, he argues that, given the darkening economic clouds around the world, traditional indicators must be the government’s top priority right now.
“I think having good outcomes in health, education and mental health is extremely important, but what is important for the treasurer and the budget is to focus on the economic position of the Australia,” he said.
“It’s going to be a tough Christmas for a lot of Australians because they see interest rates go up, they see the cost of living go up.”
Wellbeing can work during a crisis: New Zealand Deputy Prime Minister
On budget night, the concept of well-being is likely to be overshadowed by other news.
The treasurer has seemed to talk less about it in recent weeks, preferring instead to focus on inflation or talk about the “tough decisions” he needs to make to curb spending and budget waste.
But New Zealand’s deputy prime minister says welfare budgets can work anytime.
“Even in times of crisis, as we have with high inflation, the well-being approach helps because it helps to understand which groups in the community need to be supported,” Robertson said.
“Inequality as a problem is now – I think – seen by most people as an economic problem as much as a social problem.”
He says he does not expect Australia to end up adopting the same welfare measures as New Zealand, although he is delighted that Mr Chalmers plans to follow in his country’s footsteps .
“Jim is going to own it, I’m absolutely sure,” Mr Robertson said.
“But I think the type of underlying philosophy is actually very important for the progress of our countries.”