back

Not the transformation we were promised

Amanda Reid & Ganesh Nana

The Wellbeing Budget opens with, “What is wellbeing?”, a question that has been widely posed and little understood. Treasury says “Wellbeing is when people are able to lead fulfilling lives with purpose, balance and meaning to them.” Long-term challenges facing Aotearoa New Zealand include child poverty, mental health, domestic violence, growing inequality, and climate change.

The Wellbeing Budget makes a bold claim that it moves to address these complex issues through a three-pronged approach:

  • Breaking down silos to work across government
  • Focus on outcomes – present and intergenerational
  • Tracking broader measures of success.

The Budget addresses the Government’s five priorities:

  • Taking mental health seriously
  • Improving child wellbeing
  • Supporting Māori and Pasifika aspirations
  • Building a productive nation
  • Transforming the economy

An additional infrastructure priority is detailed in the Wellbeing Budget: Investing in New Zealand.

The Living Standards Framework underpins and informs the Wellbeing Budget, along with advice from sector experts and Government science advisors. Various indicators are described under the banner of the four capitals (financial and physical, natural, human, and social). It is clear the five Budget priorities are linked to the capitals, which may be considered societal assets and stocks of sustainable and intergenerational wellbeing. The indicators of current wellbeing are woven into the four capitals discussion, supporting the narrative around the evidence base for setting the priorities.

Under the new cross-sector approach, the Wellbeing Budget includes several programmes under the key priorities:

  • A whole-of-government approach to family and sexual violence with ten agencies and eight Ministerial portfolios sharing responsibility for a range of initiative (Child wellbeing priority);
  • Industry 4.0 and Future of Work working across sectors to develop policies to support a just transition. Funds have been reallocated from earmarked NZ Superannuation Fund contributions for a development network and up to two “smart factories” (Building a productive nation priority);
  • Productive and Sustainable Land Use Package – seven Ministerial portfolios providing support to the primary sector to use land more sustainably, projects to improve water quality in at-risk catchments and wetlands, and funding to establish the Climate Change Commission (Transforming the economy priority);
  • Paiheretia te Muka Tangata – Uniting the threads of Whānau – a kaupapa Māori approach to addressing high reconviction and reimprisonment rates for Māori, co-designed and implemented by Te Puni Kōkiri, the Ministry of Social Development, and Corrections (Supporting Māori and Pasifika aspirations priority);
  • The Ministries of Health and education are joining with Sport New Zealand to promote healthy eating and physical activity in schools (Child wellbeing priority);
  • Hāpaitia te Oranga Tangata – Ministry of Justice, Police, Corrections working together on a programme of increased mental health and addiction treatment and support services for those in prisons, where up to 91 percent of people have a lifetime diagnosis (Child wellbeing, Supporting Māori and Pasifika aspirations, and Taking mental health seriously priorities);
  • Te Waihanga – a new Infrastructure Commission will be established to produce an infrastructure pipeline and develop a 30-year strategy for long-term infrastructure investment. The prototype pipeline includes projects from the ministries of Education and Health, Corrections, New Zealand Transport Agency, and the Defence Force, priorities identified by the Construction Industry Accord.

The inaugural Child Poverty Report front foots the budget document (pages 20-29), describing how the various priority initiatives will fit into the Government’s ambitious child poverty reduction targets. Initiatives include removing NCEA fees, increasing funding to decile 1-7 schools to reduce the need for school donations, and indexing the main benefits to average wage growth.

Budget 2019 sits well with the wellbeing perspective with significant new investments across mental health, child wellbeing, and supporting Māori and Pasifika.

Further, there is a strong capital spend programme with hospital and school buildings topping the list. A boost to Kiwirail, investments to improve land use, and an increase from 150 to 2000 places in the apprenticeship “Mana in Mahi” programme do signal long-term perspectives in decision-making.

While this doesn’t appear to be business as usual, is this the transformation we were promised? Sadly, not really. Admittedly, it is an impressive spending budget, with $3.5bn new spend across the range of previously identified priorities. However, debt is projected at a meagre 18.7 per cent of GDP in 2023 and there is a surplus track over four years of $1.3bn, $2.1bn, $4.7bn, and $6.1bn. With these numbers it is somewhat surprising that the Government did not use more of this elbow room to trigger a dramatic transformation in business, economy, and communities across Aotearoa.

The priority investments will take some time to generate visible benefits and a sense of urgency remains missing. The announced indexing of benefit payments to average wages is an example. While laudable, the gain of between $10 and 417 per week by 2023 does little to address the current shortfall where many families receiving benefits. Earlier this year the Welfare Expert Advisory Group reported that many families were at least $90 a week short of adequate levels of income.

Similarly, the funds for improved and additional buildings for hospitals and schools is part of a 10-year programme. Further, the climate change challenge is huge, but the funds committed oozes a sense of marginal adjustments. Yes, there are a range of new initiatives: $229m to encourage sustainable land use, $8.5m investment in the Global Research Alliance on Agricultural Greenhouse Gases, $3.2m into Agricultural Climate Change Research platform. But the scale of these investments continue to underwhelm.

Without doubt, the words and intentions are well-signalled. The Budget Speech statement “…Government … is not satisfied with the status quo” is in line with the Minister’s statement at the lockup that, “the old ways of doing things have left many behind.” These are laudable. And Robertson’s strong “we are taking mental health seriously… this is just the beginning” will reassure many.

However, over time there are likely to be influences that will encourage governments, businesses, and communities to resort to the conventional ‘we can’t afford it’ mindset. That risks derailing these investments (again).

Looking ahead, embedding the wellbeing approach requires changing elements of the Public Finance Act and the State Sector Act. These changes will be critical.

Perhaps our expectations for transformation were raised too high. Or, maybe, our own expectations were unrealistic. But this Government has done little to rein in those expectations in its use of the transformation narrative.

Meanwhile the importance of budget ‘responsibility’ continues to throw a dark shadow over this administration’s desire to truly transform New Zealand.

 

 

 

This Paper was first published on berl.co.nz as What does the Wellbeing Budget tell us about wellbeing? And Wellbeing Budget 2019 – Is it transformative?

 

 

Amanda Reid & Ganesh Nana
About the author

Amanda Reid & Ganesh Nana

Amanda Reid is a senior researcher at BERL, where she specialises in wellbeing enablers and the connection between the subjective wellbeing of individuals and social wellbeing of public and private institutions and communities. She has worked on a number of projects on the Māori economy and indigenous trade for Te Puni Kokiri and the Ministry of Foreign Affairs and Trade, and undertaken research for large Māori incorporations and iwi entities. Dr. Ganesh Nana has over 30 years of experience in the field of economics including business consulting, research, tutoring and lecturing in New Zealand and the UK. He is Chief Economist of BERL (Business and Economic Research Limited), which was established by a group of economists in 1957 and remains a privately-owned New Zealand company. At BERL Ganesh has worked on a wide range of projects, including development strategies; cost-benefit analyses; labour market projections; infrastructure assessments; and examining policy options. Over the past few years Ganesh’s work has seen a focus on the Māori economy and incorporating this information into a nation-wide modelling framework. The growing importance of the Māori economy to the nation’s future economic prosperity can no longer be ignored.