Wellbeing measure for success

Finance Minister Grant Robertson speaks at the Labour Party conference in Dunedin on Saturday....
Finance Minister Grant Robertson speaks at the Labour Party conference in Dunedin on Saturday. Photo: Gerard O'Brien
Finance Minister Grant Robertson says his plans to change how economic performance is measured are intended to be bold.

"I think this is a very different way of thinking about budgets and the economy."

In his speech to the Labour Party conference in Dunedin on Saturday, Mr Robertson dubbed next year’s Budget the "Wellbeing Budget".

He told delegates a Living Standards Framework, developed by the Treasury and based on the work of the OECD, would be the basis on which the 2019 and subsequent budgets would be drafted.

"It is grounded in core economic concepts to assess the stock of our wellbeing," he said.

"So, you will hear about financial capital, human capital, natural capital and social capital ... It will evolve over the coming years, but it is a great way to start thinking about what counts as success."

Yesterday, Mr Robertson told the Otago Daily Times that while his conference rhetoric was couched with phrases such as "responsible management of the economy", he intended the 2019 Budget to begin a process of reframing how success was measured.

"By taking a different definition of success, we change the whole way the Government thinks," he said.

"This is going to be quite a process because we have to break down those silos that have created our governance system and the public service and ministers all focused on outcomes which enhance wellbeing.

"I’m not promising it will all happen at once, but it is a start."

Traditional economic indicators such as Gross Domestic Product would still be measured and still be important signals of fiscal health, but were not sufficient to give a full picture, Mr Robertson said.

However, the soon to be developed yardsticks — more details of which would be announced in next month’s Budget Policy Statement — were intended to round out how well life in New Zealand was being lived.

"It’s challenging because it’s mixing the tangible and the intangible, but we can do it and we will be one of the first in the world to do it properly."

While final details of what would be measured are not yet confirmed, in his speech Mr Robertson said he wanted to gauge economic success against financial capital, human capital, natural capital and social capital.

Mental health would also likely be a focus of government performance.

Elements of a wellbeing approach were already in place in some indicators used in Scotland, France and Italy, and their experience would help New Zealand develop its own measurements, he said.

"It will be a big, bold change, for sure," he said.

"The feedback we have been getting from international interests is that we are the first country to be doing it from end to end across a Budget cycle."

Mr Robertson acknowledged there had been issues with the 2018 Census, and said he was working with Statistics Minister James Shaw to make sure the proposed new indicators and targets were soundly based.

Other information, such as research based on the Dunedin Multidisciplinary Health and Development Study, would help frame the indicators, Mr Robertson said.

"The key for us is saying what are the things which will have the greatest impact on intergenerational wellbeing, and the Living Standards Framework will be built about that," he said.

"It may be that in the future a different government emphasises different elements, but the Living Standards Framework approach of looking across all those areas we hope will endure."

Comments

How about using GDP per person or Net Wealth per person? The former eliminates the decades old lazy politicians' approach to growing the NZ economy by importing people to "grow" our economy whilst at the same time destroying our well-being with over-population. The latter, shows what we are really worth after deducting our liabilities- what a novel approach.

 

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