To coincide with the 10 year anniversary of the publication of the Report by the Commission on the Measurement of Economic Performance and Social Progress, the Carnegie UK Trust is publishing a series of blogs which outline the approach taken to measuring and improving wellbeing by different governments, organisations and initiatives around the world.
Ten years since the publication of the Report by the Commission on the Measurement of Economic Performance and Social Progress, the lessons from it are more relevant now than ever before.
The Report’s authors – Stiglitz, Sen and Fitoussi – said: “emphasising wellbeing is important because there appears to be an increasing gap between the information contained in aggregate GDP data and what counts for common people’s wellbeing.”
In New Zealand, our most recent general election in 2017 indicated this was certainly the case. In recent years, GDP growth had outstripped many of our international peers. One economist found local fame by dubbing New Zealand a “rockstar” economy for its GDP growth rates.
For many New Zealanders, the use of this phrase jarred. Sure, we had relatively high GDP growth. But for many New Zealanders, this had not translated into higher living standards, wages or better opportunities. How could we be a rockstar, they asked, with homelessness, child poverty and inequality on the rise?
GDP remains an important measure of activity in an economy. But it doesn’t tell us about the quality of that activity. For me, a simple growth rate is just not sufficient to tell us what success looks like.
That’s why the Government we formed in late-2017 has begun measuring success through a broader range of indicators, not just financial but environmental, social and community outcomes. Together, this gives a better picture of how we are improving the living standards and wellbeing of all New Zealanders.
To succeed on these measures we are putting wellbeing at the heart of everything we do. This year, as Minister of Finance, I presented New Zealand’s first Wellbeing Budget.
Our new approach embedded wellbeing at every stage of the 2019 Budget process – from setting priorities, to analysing proposals, to making the high-level trade-offs that were required.
Budget priorities were developed on the basis of a wellbeing analysis. We looked at evidence to assess the greatest opportunities to make a difference to New Zealanders’ wellbeing.
To do this, we drew on demographic and other data from a suite of wellbeing indicators being developed by the New Zealand Treasury, as well as other evidence and advice from our Government science advisors and sector experts.
This kind of information did not necessarily tell us exactly which interventions should be made, but highlighted where interventions were most needed.
The Budget priorities we developed from this analysis were:
- Creating opportunities for productive businesses, regions, iwi and others to transition to a sustainable and low-emissions economy
- Supporting a thriving nation in the digital age through innovation, social and economic opportunities
- Lifting Māori and Pacific incomes, skills and opportunities
- Reducing child poverty and improving child wellbeing, including addressing family violence
- Supporting mental wellbeing for all New Zealanders, with a special focus on under 24-year-olds.
These represent some of the biggest long-term challenges and opportunities that New Zealand faces as a country. These are obviously complex, multi-faceted issues, requiring sustained attention and a collaborative, joined-up Government. They will not be solved in one go.
Having determined the priorities, we directed every Government Minister and department to focus their Budget bids on policies that would contribute to addressing these priorities. We also told them to work together and coordinate work across Government to tackle these challenges. Cross-agency bids that focussed on intergenerational outcomes across these priorities would be put at the front of the queue.
This meant that areas like mental health weren’t just limited to our Minister and Ministry of Health to address. Our Health, Housing, Corrections, Police and Maori and Pacific Ministers all contributed to a package aimed at improving mental health outcomes in New Zealand because we had chosen to take a joined-up government approach.
It is important to note that the budget process is just one tool (albeit a powerful one) available to governments to improve peoples’ wellbeing, and we are going to build on this process in future Budgets. We are also working to ensure our legislative framework, and agency planning, reporting and accountability arrangements shift to support a focus on wellbeing outcomes.
We know that we also have more to do to ensure that our wellbeing framework represents the values of New Zealand, and that we have the data and indicators to back that up.
I acknowledge that government is not the sole determinant of a person’s or a community’s individual wellbeing. What we are doing as a Government with our wellbeing focus is putting in place the structures to enable people to lead fulfilling lives with purpose, balance, meaning to them.
We feel we have made a good start, but still have a way to go. It’s through the work of governments and organisations like the Carnegie UK Trust, that we can continue pushing for a broader idea of success – for a world where we measure ourselves by the extent to which we improve the overall living standards and wellbeing of all people.