17 May 2019

The Wellbeing Budget explained: What you need to know ahead of its unveiling

9:03 am on 17 May 2019

There's been much hype and debate - both local and international - surrounding the coalition government's first Wellbeing Budget.

11 October 2018. Prime Minister Jacinda Ardern and Sport and Recreation Minister Grant Robertson have launched a new strategy that champions equaility for NZ women and girls in sport and active recreation.

Finance Minister Grant Robertson announced his priorities for the Wellbeing Budget in December. Photo: RNZ / Dan Cook

With less than two weeks until its unveiling, RNZ is looking at what's new in the Budget process, and whether organisations beyond government agencies support it.

What's new

Finance Minister Grant Robertson said it could be boiled down to three fundamental differences.

Unlike Budgets of the past, where it's operated like a contestable fund with the finance minister and some other senior ministers making fairly arbitrary calls, this was a more "joined up" approach, he said.

Outside of the demand driven-business as usual spending, ministers, agencies, and departments have had to work together to satisfy five Budget priorities.

Secondly, initiatives have been considered through a lens of what they could deliver for "long term, intergenerational benefit".

This diagram compares a traditional Budget process to the Wellness Budget process.

Photo: Supplied / Treasury

The third difference is how success is measured.

Rather than a big focus on GDP, a range of different indicators have been developed, by and large through Treasury's Living Standards Framework.

This uses usual indicators like unemployment, income levels, and household ownership, but also some more subjective measures.

Things like 'How connected are we to our communities?' or 'How secure and confident do we feel as people?'.

The Living Standards Framework was also used to help create the five main priorities.

Wellbeing priorities

  • 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.
The priorities of the Wellbeing Budget

Photo: Supplied / Treasury

New look budget

This year's Budget has been modelled to be more like a company's annual report - where the front two thirds tell the story of what the business is doing and why, and the back third presents the numbers and accounts.

Mr Robertson said the government wanted to do a better job of telling a story about what it was doing, and why.

While it will look a bit different, there would still be plenty of information for people to see where money had been allocated, he said.

Scepticism v support

National's Finance spokesperson Amy Adams said the Wellbeing Budget was a slick marketing campaign with nothing in it that previous governments hadn't been doing for time immemorial.

"Every budget initiative when I was sitting around the budget decision making table was assessed against 'How does this work with our priorities?', 'How does this improve the lives of New Zealanders?'

"None of that is new. But I think the government is trying to paint it as some revolution to distract from the real data which is consistently getting worse for a lot of people", she said.

But Business NZ chief executive Kirk Hope said in his experience, government had operated in a particularly siloed fashion, and taking an holistic approach to wellbeing extended to good business outcomes.

"I doubt there's a business leader of any note or worth in the country who wouldn't think that investing properly and appropriately in kids isn't a smart thing to do.

"Many of the so called social issues actually play out in a very real way and workplaces all over the country," he said.

Council of Trade Unions president Richard Wagstaff said there was plenty of international interest, because New Zealand was leading the way.

"It's a really important and courageous step to go down this path.

"I think it will fundamentally reset our thinking when it comes to Budget time", he said.

Measuring success

Ms Adams is worried about a lack of accountability for performance in the Wellbeing Budget.

The Living Standards Framework Dashboard will report once every four of five years and will provide a snapshot in time without linking specifically to any policy initiative.

Ms Adams gave an example around mental health spending without specific targets to meet.

"How can we as taxpayers see the money that what the government has spent has actually helped to improve youth suicide rates or early onset of mental health issues or serious clinical response rates?," she said.

The Salvation Army also has concerns about how success will be measured.

In its State of the Nation report this year, it was sceptical the government had done much to improve wellbeing so far.

Social policy director Ian Hutson said while he supported the general idea, woolly targets could be an issue.

"We think that it's a good initiative and something to be affirmed.

"It's just a question of how it gets done, and whether it gets too ethereal in the way it's carried out."

But Mr Robertson said there would be very clear ways to measure whether the government was improving wellbeing or not.

He pointed to the Child Poverty Report as a concrete set of measures for how the government was tracking.

He was not promising perfection on his first go, but said at its core it was a new approach, which would lead to fundamental, tangible change.

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