Treasury lifts lid on wellbeing work

Updated

Treasury Secretary Gabriel Makhlouf says he hopes to release a series of wellbeing indicators by the end of the year. Photo: Lynn Grieveson.

The Treasury has shed further light on how it is developing wellbeing measures to guide government policy, with the organisation’s head saying New Zealand is leading the world in its efforts.

Treasury Secretary Gabriel Makhlouf says his goal is to design a framework which “governments of whatever political colour” can measure themselves against and be assessed on by voters.

At a January event to mark the completion of the Government’s 100-day plan, Prime Minister Jacinda Ardern revealed the Government wanted to introduce by 2019 a tool and framework to “make the wellbeing of our people a measure of our economic success”.

“We want New Zealand to be the first place in the world where our budget is not presented simply under the umbrella of pure economic measures, and often inadequate ones at that, but one that demonstrates the overall wellbeing of our country and its people,” Ardern said.

Speaking to Newsroom, Makhlouf said the Treasury was in some respects well-prepared for the Government’s plans, having worked on the Living Standards Framework under the National government.

The Treasury on Thursday morning released papers on three of the four “capitals” it is looking at - natural, social, and human - with a paper on fiscal capital to be released later in the year.

“We’re humble, we don’t pretend we know all the answers...what we’re trying to do is to encourage thought, contributions, responses from them to help inform our thinking.”

It also released a paper on what a potential wellbeing framework could look like, and another delivering an official Treasury view on the project.

The papers were designed as “discussion documents” designed to gather feedback on the Treasury’s work to date, Makhlouf said.

“We’re humble, we don’t pretend we know all the answers...what we’re trying to do is to encourage thought, contributions, responses from them to help inform our thinking.”

Makhlouf said the Treasury was aiming to develop a set of possible “indicators” for the four capitals by the end of the year.

“The reality is we’re not going to come up with one number that says, oh we’ve improved social capital because it’s gone from x to y - the reality is that we're likely to have a series of indicators that governments will be able to choose and stand by, and hold themselves to account when they go back to the country for an election.”

Developing wellbeing measures would make it easier for governments to explain the impact of their policies, he said, citing Wednesday’s release of the CPTPP trade deal analysis as an example.

“I’d like to think that we’ll reach the point, and I’m not going to put a date on it, when actually somebody like David Parker could say, we think the benefits of this agreement are going to do this much to GDP, but they’re going to do this much to our natural capital - that they’ll actually be able to talk about the impact of trade agreements in a way that is in the wellbeing context.”

“It’ll be flexible but it’ll still have a foundation that all governments of whatever political colour would be happy to accept - I mean, the current fiscal rules have been over 25 years and parties of different complexions have basically used them.”

Makhlouf said the work was “exciting but challenging”, with New Zealand leading the world in its efforts to integrate a wellbeing network into policy making.

“Around the world people have talked about this conceptually. The OECD has produced a sort of Better Life index which we’re modelling some of our work on that, but nobody has said, ‘Right, let's use this to develop public policy. Let’s use this to start making decisions around resource allocation’, which the Minister of Finance has said he wants to do.”

He pointed to the Ministry for the Environment’s environmental reporting, covering the “five domains” - air, atmosphere and climate, fresh water, land, and marine - as an example of how subsets could be arranged under each capital.

“If you just take that as an example, I’m not sure you could turn those [five] into one number, but you may decide actually those are the ones you want to focus on - you may want to put more in.”

The goal was to develop practical measures that were capable of use in real life, with a cross-party consensus that would endure changes of government.

“It’ll be flexible but it’ll still have a foundation that all governments of whatever political colour would be happy to accept - I mean, the current fiscal rules have been over 25 years and parties of different complexions have basically used them.”

Makhlouf believed the Treasury was on track to deliver the wellbeing measures in time for the 2019 Budget - although he noted Ardern herself had noted that would be a challenge.

  • This story has been updated following the release of the Treasury documents.