At the end of this month, New Zealand will release its first “Well-being Budget”. It builds on treasury’s Living Standards Framework (LSF), published last December, which introduced a suite of well-being measures, including cultural identity, environment, housing, income and consumption, and social connections.
To help interpret what this might mean for policy, I look at how well-being has been used as a guide for policy elsewhere.
Let’s first look at some prime ministerial words:
Wealth is about so much more than […] dollars can ever measure. It’s time we admitted that there’s more to life than money, and it’s time we focused not just on GDP, but on GWB - general well-being.
And some words from treasury:
The ultimate value of the well-being framework is that it improves the quality of Treasury’s policy advice to government, through helping to identify the important trade-offs for well-being, and providing a consistent basis for understanding their impact.
The eagle-eyed will have noticed some words left out of the first quotation. They are “pounds, or euros or”. The quotation is from UK prime minister David Cameron, in 2006. The second is from the Australian Treasury in 2004, prepared during the Howard government. Its framework built on an Australian Bureau of Statistics (ABS) publication in 2001.
In introducing the LSF, the New Zealand Treasury stated:
There is more to well-being than just a healthy economy. That’s why the Treasury has developed its Living Standards Framework (LSF) – it helps us advise governments about how the policy trade-offs they make are likely to affect everyone’s living standards.
This is an amalgam of the Cameron speech and the Australian Treasury approach of the mid-2000s. Is there anything new in the New Zealand government’s approach that conservative governments in the UK and Australia had not already considered over a decade ago?
International well-being initiatives
There was another well-being initiative in France, based on the highly publicised Stiglitz-Sen-Fitoussi (SSF) report in 2009. That report, headed by Jean-Paul Fitoussi and Nobel laureates Joseph Stiglitz and Amartya Sen, was commissioned by French president Nicholas Sarkozy – again a conservative on the political spectrum. It recommended monitoring a broad list of indicators of well-being and sustainability to guide policy.
The UK well-being initiative died as a policy framework with the demise of David Cameron. But the Office of National Statistics has kept the UK’s well-being indicator framework alive. The Australian initiative was maintained by its treasury to inform policy considerations, but it never made it to the frontline of political debate.
The French framework is alive and well. A 2015 budget law requires the French government to report the evolution of new wealth indicators and to assess major reforms. Similar frameworks have been formally adopted as a basis for policy in several other countries.
New Zealand’s approach to well-being
The New Zealand approach is far from new, but it has some distinctive features. Most obviously, it addresses the well-being of New Zealanders rather than people elsewhere. The parallel Stats NZ well-being indicator framework, Indicators Aotearoa New Zealand (IANZ), includes a selection of measures of how New Zealand interacts with the well-being of the rest of the world.
The LSF bears close similarities to the OECD’s Better Life Index. The LSF dashboard comprises 38 indicators across 12 well-being “domains” and measurements of inequalities across different population groups for nine of those domains.
Authors: Arthur Grimes, Professor of Wellbeing and Public Policy, Victoria University of Wellington