A Wellbeing Budget

The Prime Minister in her speech to New Zealand two days ago said that in the future, money given for various projects by the government will need to contribute to New Zealanders’ wellbeing, not just to our GDP. Previously, the measure of success of a government has been economic – an improved GDP. However, there is a mood for change, not just in New Zealand, but in many developed countries.

Jacinda Ardern said that those who want government money will need to show how this money will improve our natural, social, human or possibly cultural wellbeing. Our natural wellbeing concerns our environment, including energy. Social wellbeing is about housing, a good standard of living, and how people relate to each other in communities; human wellbeing includes people’s skills, education, health, work and recreation. Cultural wellbeing concerns cultural identity, perhaps also music and the arts, but also about how we feel in comparison with other countries.

These are Ms Ardern’s words: “It will no longer be good enough to say a policy is successful because it increases GDP if, at the same time, it also degrades the physical environment, or drives down wages or fractures a community.”

Treasury has been working on how to define these factors since December. New Zealand is not the first country to consider wellbeing. For example, in 2010, the UK Prime Minister, David Cameron, talked about the importance of happiness, of general wellbeing, not just improved GDP. In 2011, the OECD published a Better Life Index and rated the countries in the OECD on 11 factors.

New Zealand is planning to host the Third International Conference on Wellbeing and Public Policy in September.

Vocabulary

• Budget – how the government spends its money
• wellbeing – feeling OK, feeling happy
• GDP – Gross Domestic Product. It’s a way of measuring the economic success of a country. It measures what is produced by the people and products
• degrades – makes something much worse, opposite of improves
• fractures – breaks
• Treasury – a government department giving advice on financial matters
• OECD – Organisation for Economic Co-operation and Development has 35 member countries

Questions

What factors do you think should be included as indicators of wellbeing?
How do you feel about this new way of measuring success of a budget?






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