Finance Minister Robertson wants well-being measures in place for 2019 budget
By Paul McBeth
Dec. 14 (BusinessDesk) - Finance Minister Grant Robertson wants to go beyond mere dollars and cents to measure the government's success in the 2019 budget, tasking the Treasury to develop a world-first framework.
The public will get a taste of where the government wants to move when it changes the Public Finance Act as part of its 100-days programme to show how many children have been lifted out of poverty in next May's budget. However, Robertson said that's an entree for what will be "a major change in the way we identify what is success in this economy".
"This is world-leading work, but it is important work as well that we get on and do it," he said. "For budget 2019 we should be in a position to be able to report the measure of success and indeed identify priorities for spending in line with the living standards framework."
The Treasury started developing a living standards framework under former secretary John Whitehead, formalising the way officials weigh up social and environmental impacts as opposed to the ad hoc methods previously. That's been tinkered with over the past six years, and in the final Treasury guest lecture of the year, current secretary Gabriel Makhlouf yesterday said the department will produce a series of discussion papers in February focusing on further defining the four capitals it sees as measuring society: natural capital, social capital, human capital and financial/physical capital.
"Thinking about the four capitals together - and some of the policy issues associated with each of them - you start to see from an economic policy perspective, how it's a bit like playing that string game Cat's Cradle which many of us played as children: everything interconnects and when you tug on one end it distorts the shape in other places," Makhlouf said.
The Treasury wants to hear from people in the "academic and practitioner communities" to help fill the gaps in its knowledge across the four types of capital, and Makhlouf said no one organisation will be able to answer all the questions.
"Weaving the LSF into public policy provides a significant opportunity for the Treasury and the wider policy community," he said. "It is another leap of thinking and we want to stay at the leading edge through working together with others to develop new frameworks that redefine how we design and deliver policy."
Robertson said there aren't any international models deep enough for what the government wants to achieve, but says Treasury is "up to the challenge".
The Organisation for Economic Cooperation and Development released its 2017 wellbeing measure overnight, which showed New Zealand continued to perform well across a number of indicators, with higher employment and lower joblessness than the norm among developed nations and one of the highest levels of social support. While the homicide rate was low relative to its peers, only 65 percent of people said they felt safe walking at night compared to the OECD average of 69 percent.
The government's plan to measure against a wider set of well-being indicators is part of its governing agreement with the Green Party to commit to work on new sustainable development measures.