The Wellbeing Budget

The Wellbeing Budget

What's next for the wellbeing approach?

The Government is committed to delivering the wellbeing approach in Budget 2020 and beyond. This will continue the progress we have made to embed wellbeing into the heart of the Government's policy-making. However, achieving genuine and enduring change requires a public sector and systems geared towards this new way of working.

The Government has already passed legislation to support the wellbeing approach. The Child Poverty Act 2018 requires the Government to have measures of child poverty and clear targets for improving them. The accompanying amendments to the Public Finance Act 1989 also require the Government to report on progress towards these targets at Budget time. The Child Poverty Report section of this document delivers on this for the first time (see page 20). section of this document delivers on this for the first time.

The Government also intends to amend the Public Finance Act to ensure wellbeing remains a focus in future Budgets. This will mean future Governments have to set out how their wellbeing objectives, together with their fiscal objectives, guide their Budgets and fiscal policy. Additionally, the Treasury will be required to report on New Zealand's wellbeing data at least every four years.

Achieving meaningful change requires the State sector to make progress more quickly on priorities that improve the wellbeing of New Zealanders. The Government intends to reform the State Sector Act 1988 to support a public service that puts people at the heart of how it organises services. These changes will join the public service together around citizen-focused outcomes and services and support new models for working across sectors.

Finally, we will implement a work programme across government to embed wellbeing. This will include changes to the way agencies plan, report and measure their progress. More information on these changes will be released in the coming months.

The Treasury's LSF (Living Standards Framework) and Dashboard

To provide a robust framework for the Wellbeing Budget, the Government asked the Treasury to further develop and accelerate the work it has done on its LSF. The LSF builds on 30 years of New Zealand and international wellbeing research, in particular from the OECD, to build a New Zealand framework for considering the intergenerational wellbeing impacts of policies and proposals.

The Treasury developed the LSF to improve the quality of its policy advice. It is a framework to support the use of wellbeing data and evidence to better understand the interactions between potential policy choices available to governments. In applying the LSF in its policy advice, the Treasury aims to bring the same level of analytical rigour to assessing wellbeing benefits as is applied to fiscal costs.

Figure 2 – The Treasury's Living Standards Framework

The Living Standards Framework.

To support this work, the Treasury has released the LSF Dashboard. The Dashboard provides a range of wellbeing indicators and analysis that informed Budget 2019 and are discussed in the New Zealand's wellbeing section of this document. No single set of indicators can capture all that matters for all New Zealanders, but the Dashboard provides one perspective on the difficult question of how we can measure a country's wellbeing.

The current Dashboard is the first version and further work is needed to ensure future versions improve known gaps and limitations. These include more fully and richly expressing and representing Te Ao Māori perspectives, child wellbeing, New Zealand cultural identity, and risk and resilience. Future updates will also look for opportunities to increase alignment with Indicators Aotearoa New Zealand developed by Stats NZ, which provides a comprehensive suite of social, cultural, environmental, and economic indicators.

For further information on the LSF, see https://treasury.govt.nz/information-and-services/nz-economy/living-standards. For the LSF Dashboard, see https://treasury.govt.nz/lsfdashboard.

Table 2 – Wellbeing indicators in the Treasury's LSF (Living Standards Framework) Dashboard

Indicators of New Zealand's current quality of life
(Domains of wellbeing)
Civic engagement and governance
  • Voter turnout
  • Trust in government institutions
  • Perceived corruption
Cultural identity
  • Te reo Māori speakers
  • Ability to express identity
Environment
  • Air quality
  • Access to the natural environment
  • Water quality (swimmability)
  • Perceived environmental quality
Health
  • Healthy life expectancy
  • Health status
  • Mental health
  • Suicide rate
Housing
  • Household crowding
  • Housing cost
  • Housing quality
Income and consumption
  • Disposable income
  • Financial wellbeing
  • Consumption
Jobs and earnings
  • Unemployment rate
  • Employment rate
  • Hourly earnings
Knowledge and skills
  • Educational attainment (tertiary)
  • Educational attainment (upper secondary)
  • Cognitive skills at age 15
Safety and security
  • Intentional homicide rate
  • Domestic violence
  • Workplace accident rate
  • Feeling safe
Social connections
  • Social network support
  • Loneliness
  • Discrimination
  • Māori connection to marae
Subjective wellbeing
  • General life satisfaction
  • Sense of purpose in one's life
Time use
  • Leisure and personal care
  • Paid work
  • Unpaid work
Indicators of New Zealand's sustainable and intergenerational wellbeing
(Capitals)
Financial and physical capital
  • Total net fixed assets
  • Net intangible fixed assets
  • Household net worth
  • Multifactor productivity growth
  • Net international investment position
  • Total Crown net worth
Human capital
  • Educational attainment (tertiary)
  • Educational attainment (upper secondary)
  • Expected educational attainment
  • Non-communicable diseases
  • Cognitive skills at age 15
  • Life expectancy
Natural capital
  • Natural hazard regulation
  • Climate regulation
  • Sustainable food production
  • Drinking water
  • Biodiversity and genetic resources
  • Waste management
Social capital
  • Trust held in others
  • Perceived corruption
  • Discrimination
  • Trust in government institutions
  • Sense of belonging
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