Jacinda Ardern introduces the world's first national economic "wellbeing budget". The grassroots are watching...

New Zealand’s Wellbeing Budget (click on image to  download PDF )

New Zealand’s Wellbeing Budget (click on image to download PDF)

So many of us critique Gross Domestic Product (or GDP) as a measure of economic performance for a society.

The obvious example: when there’s a car crash, or if a climate-crisis-induced hurricane hits, GDP goes up - all the services responding to these calamities are increasing economic activity, after all. So it’s heedless of other measures, beyond production of goods and spending power, that we might apply to achieving a better society.

“Wellbeing”, for the last decade or so, has arisen as an alternative measure of collective progress. As one of its great advocates, Nobellist and economist Joe Stiglitz, put it in 2018:

If we focus only on material wellbeing – on, say, the production of goods, rather than on health, education, and the environment – we become distorted in the same way that these measures are distorted; we become more materialistic… If we want to put people first, we have to know what matters to them, what improves their wellbeing and how we can supply more of whatever that is. 

We have reported on the Wellbeing Alliance before, in which a group of nations have come together to explore ways of changing their economic targets. One of those was New Zealand. This week, their Prime Minister, Jacinda Ardern, announced that the country was launching the world’s first-ever “Wellbeing Budget” (PDF download here) meaning that its overall goals would be defined by the pursuit of wellbeing targets, rather than purely productive or fiscal targets.

The New York Times report spells out what that precisely means:


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…

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 [which brings the overall budget to NZ$1.9bn (£980m].

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.

[The Guardian also reports: Half a billion was earmarked for the “missing middle” particularly – New Zealanders suffering from mild to moderate anxiety and depressive disorders that did not require hospitalisation but significantly affected their quality of life.

Close to half a billion would be spent on new frontline mental health workers stationed in doctor’s surgeries and Indigenous clinics, with the government aiming to help 325,000 people with “mild to moderate” mental health and addiction needs by 2023-24.]

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.

The emphasis on spending for mental health is fascinating. It always invites the response that we have occasionally given voice to in these pages, which is the degree to which these mental maladies are generated by our business-as-usual economic and social systems.

One assumes that “reducing child poverty”, “thriving in a digital age”, and “transitioning to a low-emission, sustainable economy” will also be tooled towards reducing mental distress from their end - rather than frazzling individuals with competition and status anxiety… Won’t they?

New Zealand isn’t so far ahead on the wellbeing economics agenda. As Jennifer Wallace from the Carnegie Trust comments here, the Scottish Government guides its own national performance by its National Outcomes - “now with statutory weight through the Community Empowerment (Scotland) Act 2015… These take GDP off its pedestal and put it at the same level as our other outcomes: those that are environmental and social in nature.”

And although possessing less powers than either New Zealand or Scotland, Wales has had a Wellbeing for Future Generations Act since 2015, enjoining all public organisations to carry out "sustainable development". It identifies several "well-being goals" for public bodies, including "attractive, viable, safe and well-connected communities".

However, a recent attempt by a community to use the Act to stop the closure of a primary school in Neath Port Talbot was rejected by a court judge. In her opinion: “I do not find it arguable that the 2015 act does more than prescribe a high-level target duty which is deliberately vague, general and aspirational and which applies to a class rather than individuals”.

So it’s pleasing to see that the dogged and patient policy advocacy of the “wellbeing community” can sometime have an effect on the governing classes and their macro-level approaches. But we still strike a note of caution about improvement of local communities by broad-brush government targets.

When localities strongly decide what wellbeing means to them (say, through citizens action networks and collaboratories), will that demand meet the resources at the centre? Let’s keep checking.