Dr Keith Suter AM is an economic and social commentator and one of Australia’s most influential Global futurists. He is the foreign affairs editor for Channel 7’s Sunrise program. In this article below Keith discusses a world first. The New Zealand Government is implementing a new style of budget called a ‘Wellness Budget’ which is essentially puts people first.
Numbers can lie and economists can figure. We live in a world of numbers but somehow the numbers do not always reflect the lived reality of ordinary people.
Jacinta Arden’s New Zealand government is setting a new pattern for how we measure “progress”. In its recent national budget, it has reduced the significance of gross national product (GNP). (There is also “gross domestic product”: GDP) but the difference in this context is not important and so I will stick with “GNP”.GNP is the annual measurement of money moving through a national economy. It makes no distinction between “good” or “bad” activities – simply that money moved to pay for goods or services.Politicians talk a great deal about increasing GNP. But that can be a meaningless statement – as Arden now accepts.
Welcome to the whacky world of economists and politicians.In fairness to the US economist who pioneered this work (Simon Kuznets, 1901-85) he did not argue that the measurement of GNP would automatically provide an indication of individual wellbeing. It is possible – as we see in many societies – that an economy can be doing well but there is still widespread poverty.Hence the international attention given to this year’s New Zealand budget – the world’s first “wellbeing budget”.
The government is explicitly putting people first.The standard political language is that we need to “grow the pie” rather than spend time discussing how it is to be divided up. For example, many governments have introduced austerity programmes to boost the national economy since the 2008 global financial crisis. But the programmes have come at the cost of many people.Public anger at these austerity measures has given rise to political developments such as the 2016 Donald Trump election in the US and the 2016 “Brexit” vote in the UK to leave the European Union.
New Zealand is putting wellbeing first. The 2019 budget includes billions of dollars for mental health, support for indigenous people, victims of domestic violence, and reducing childhood poverty. Government departments are giving priority to the wellbeing of people who previously had little political power.
New Zealand will develop social indicators on how well people are faring. There will still be the measurement of GNP but it will no longer have the overwhelming significance it used to enjoy.Some economists and think tanks (such as the Club of Rome, of which I am a member) have longed argued for less reliance on GNP measurement and for the development of better official indicators of national wellbeing. There has to be a change in political vocabulary.
New Zealand is now actually doing it. It will be interesting to see how this works out. Tomorrow arrives first in New Zealand.