New Zealand’s Next Liberal Milestone: A Budget Guided by ‘Well-Being’

WELLINGTON, New Zealand — It’s being called the next big move by a New Zealand government seen by progressives around the world as a beacon in increasingly populist times: a national budget whose spending is dictated by what best encourages the “well-being” of citizens.

That means that as the center-left government of Prime Minister Jacinda Ardern sets its priorities in the budget that will be unveiled on May 30, it is moving away from more traditional bottom-line measures like productivity and economic growth and instead focusing on goals like community and cultural connection and equity in well-being across generations.

“This budget is a game-changing event,” said Richard Layard, a professor at the London School of Economics who is an expert on life satisfaction across populations.

New Zealand is not the only country that is starting to rethink whether blunt economic measurements like gross domestic product are the best gauge of a nation’s success. But, Dr. Layard said, there has been “no other major country that has so explicitly adopted well-being as its objective.”

As a major example of what that new framework will produce, Ms. Ardern unveiled on Sunday the biggest spending proposal to date in her coming budget: more than $200 million to bolster services for victims of domestic and sexual violence.

It is “the biggest single investment ever” by a New Zealand government on the issue, Ms. Ardern said at an event showcasing the initiative, and will tackle one of the nation’s “most disturbing, most shameful” problems.

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The Auckland City Mission, which provides social services for people who are homeless or poor. One of the government’s pre-budget announcements has promised housing for the homeless population.CreditAsanka Brendon Ratnayake for The New York Times

Under New Zealand’s revised policy, all new spending must advance one of five government priorities: improving mental health, reducing child poverty, addressing the inequalities faced by indigenous Maori and Pacific islands people, thriving in a digital age, and transitioning to a low-emission, sustainable economy.

The government is promoting the new framework as bringing much-needed clarity to the budgeting process. In the past, individual government ministers vied for the new money available in each year’s budget, and “relatively arbitrary” decisions were made about who got what, the country’s finance minister, Grant Robertson, said in an interview.

This year, those ministers have to collaborate on funding proposals with their colleagues, and the proposals must fit the new criteria. “Governments are notorious for their silos, and so we’re actually saying, no, there’s an outcome there that we want you all working together on,” Mr. Robertson said.

To the center-right political opposition, however, all this talk is nothing more than “slick branding” of longstanding shared policy goals. New Zealand governments of all political stripes, the opposition argues, have always tried to improve people’s lives through taxpayer spending.

“New Zealanders won’t benefit from a government that is ignoring the slowing economy and focusing instead on branding,” Amy Adams, a lawmaker in the opposition National Party, said in a statement. “We’re facing significant economic risks over coming years, but this government is focusing on a marketing campaign.”

While the country may indeed be facing some economic headwinds, New Zealanders have been among the most contented people on the planet, according to the World Happiness Report, which is produced by the United Nations Sustainable Development Solutions Network. The study ranked New Zealand in eighth place on its 2018 list of the world’s happiest countries, after the Nordic nations — led by Finland — Switzerland and the Netherlands.

And it remains to be seen just how different the budget will look this year. Liberals across the globe may have swooned this year when Ms. Ardern moved to ban semiautomatic weapons within days of the Christchurch terrorist attacks, but in reality her government is not a radically progressive one, said Arthur Grimes, an economics professor at Victoria University of Wellington and a former chairman of New Zealand’s central bank.

New Zealand’s finance minister, Grant Robertson, said government agencies now had to collaborate on spending proposals.CreditHagen Hopkins for The New York Times

Dr. Grimes said that outside the budget, Ms. Ardern’s party had passed up opportunities to enact measures that might have significantly reduced economic and social disparities — including implementing a capital-gains tax or overhauling welfare — in favor of policies that benefited those less in need, like older people and students.

There is no denying that Ms. Ardern has secured a string of progressive victories, banning plastic bags, bolstering action on climate change and instituting paid time off for domestic violence victims. But in her less than two years in power, she has also been criticized as sometimes relying more on gauzy promises of “kinder” government policies than concrete proposals.

“I’m sure they will do something meaningful in this budget, but they could do more,” Dr. Grimes said.

Still, he said he was optimistic that the new budget approach would be a success, at least as an organizing principle. Budget planning often lacked focus in the past, he said, but officials in government agencies have told him that is not the case this year.

“If you’re not addressing one of those five priorities, you’ve got almost no hope of a budget bid being successful,” he said.

The package of help for domestic and sexual violence survivors announced by Ms. Ardern was the result of a joint bid among seven agencies and New Zealand’s attorney general. The goal is to take pressure off the police as the primary responders to such matters, Mr. Robertson, the finance minister, said.

Along with that package, other pre-budget announcements have promised housing for the homeless population and an effort to reduce the number of Maori in prisons, where they are overrepresented.

At Parliament in New Zealand’s capital, Wellington, the offices of the finance minister were on lockdown in the days before the budget’s release to keep its full contents a secret.CreditHagen Hopkins for The New York Times

As New Zealand pursues its “well-being budget,” it is heeding a call from the Organization for Economic Cooperation and Development, a group of the world’s most advanced economies, Dr. Layard, the British economist, said. While several other countries — including France, Britain and the United Arab Emirates — have adopted language or measurements related to well-being, he said, none have tied the prioritizing and evaluation of policies as closely to people’s welfare as New Zealand has.

But not all of the budget is covered by the well-being framework. Core spending — on schools, hospitals and roads, for example — will be allocated in the usual way.

Mr. Robertson said the well-being model would cover more of the budget each year — for as long as his Labour-led government is in power to continue it.

In New Zealand’s fast-paced, three-year electoral cycle, Mr. Robertson said he was keenly aware that much of the change his government wants — reducing inequality, increasing life satisfaction — would not be enacted in time for the next election in 2020.

But he said he believed that voters might be willing to bear with him. Despite a strong global economy, he said, people have grown distrustful of government and institutions, and want progress to be measured differently.

“It’s some of that gap between rhetoric and reality that’s been exploited by populist movements and people around the world,” he said.

“If we’re going to rebuild trust and faith in our politics and our political system, we have to be talking about the things that matter to people.”

Source: NYT

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