Budget 2021 and the wellbeing approach
Our evolving wellbeing approach
The Labour Government is committed to achieving its policy goals using a wellbeing approach. This means giving people the capabilities to live lives of purpose, balance, and meaning to them. To do this, we are looking beyond traditional measures of success, such as Gross Domestic Product (GDP), to broader indicators of wellbeing.
We are continually evolving our wellbeing approach and our understanding of what wellbeing means to New Zealanders. For Budget 2021, we have built on work from the previous two Budgets by continuing the application of the Living Standards Framework and introducing a te Ao Māori view of wellbeing through He Ara Waiora. He Ara Waiora and the Living Standards Framework can be used alongside each other to explore wellbeing from different cultural perspectives, values, and knowledge systems.
Living Standards Framework - Application of the Treasury's Living Standards Framework is key to continue the progress we have made to embed wellbeing into the Government's decision-making process. The Living Standards Framework has been used in previous Wellbeing Budgets and requires analysis of policy impacts across the different dimensions of wellbeing. It includes four capitals: human, natural, social, and financial and physical capital, and 12 domains of wellbeing, such as housing and social connections, which reflect our current understanding of the things that contribute to how New Zealanders experience wellbeing. These domains provide a wider account of the outcomes that Government can affect, which helped to inform investment decisions.
He Ara Waiora - Incorporating He Ara Waiora into Budget 2021 is an important step to develop our wellbeing approach so that it reflects the national and cultural context unique to Aotearoa New Zealand. The principles of He Ara Waiora are derived from mātauranga Māori and many of its elements are relevant to the wellbeing of all New Zealanders. This is an important new dimension to our Budget process, which we will develop over time. He Ara Waiora was first conceived as part of the work of the Tax Working Group and since then has been further developed alongside a group of Māori business and thought leaders.
The principles of He Ara Waiora provide guidance on how to achieve greater wellbeing for our people. The principles of He Ara Waiora are:
- Kotahitanga - Working in an aligned, coordinated way
- Tikanga - Making decisions in accordance with the right values and processes
- Whanaungatanga - Fostering strong relationships through kinship and/or shared experience that provide a shared sense of belonging
- Manaakitanga - Enhancing the mana of others through a process of showing proper care and respect
- Tiakitanga - Guardianship, stewardship (eg, of the environment, particular taonga, or other important processes and systems).
As a first step we have taken an indicative approach to applying He Ara Waiora in this Budget by considering the alignment of initiatives to He Ara Waiora concepts and principles. He Ara Waiora consideration was not just for the initiatives that are focused on Māori but across the whole Budget package. This work has only just begun for Budget 2021, with a view to developing a more comprehensive application in future Budgets. We expect to learn and grow in terms of the way we do this.
Looking beyond Budget 2021 we are modernising the public finance system to better support wellbeing for all New Zealanders in the 21st century. The wellbeing approach has been an effective framework for making sure high-level budget decisions are directed toward things that make a difference in people's lives. We need to make sure that we continue to build on this progress and ensure that these changes are enduring features of the way in which the public finance system operates.
We are piloting several changes, which will inform our investments for Budget 2022. This includes establishing two clusters of agencies - Justice and Natural Resources - to set priorities, review existing spending and support the development of future Budget packages.