MAX HAYTON. New Zealand’s Wellbeing Budget.

Jun 4, 2019

The New Zealand Labour Government’s first Wellbeing Budget is intentionally unconventional.  It is the start of a process which the government of Jacinda Ardern hopes will continue to reposition New Zealand’s economy and society after decades of centre-right economics. 

There were good reasons why the New Zealand Government under Prime Minister Jacinda Ardern chose issues around mental health and addiction to anchor its first Wellbeing Budget.

Like many similar nations New Zealand suffers from a high incidence of addiction to alcohol and drugs.  These addictions lead to high rates of depression and anxiety, domestic and sexual violence, crime and incarceration and poverty including child poverty, the very opposite of a “caring society.”

In his Budget Address on May 30 the Minister of Finance Grant Robertson said New Zealand had a relatively high rate of GDP growth while other measures that citizens most valued had gone backwards like child wellbeing, a warm, dry home for all, mental health services and rivers and lakes with water fit to swim in.

The things that New Zealanders valued had not been sufficiently valued by previous governments. “And because they were not being valued they were not being measured, and because they were not being measured, they were not being done.”

The process of measuring wellbeing used a Living Standards Framework Dashboard.  It draws on 61 indicators that cover everything from incomes and home ownership rates to subjective wellbeing and the sense of connection to communities.

The wellbeing issues addressed by the Budget were measured against the Dashboard and Ministers had to show they would lead to improvements that were not only financial but which affected the health of people and the environment, the strength of communities and the prosperity of the nation.

At the same time the government kept to strict Budget Responsibility Rules with surpluses across the forecast period and net debt reducing to below 20 per cent of GDP in 2021/22.

Many areas of New Zealand society are at or above OECD medians but there are areas where the government needs to intervene and invest to improve the overall wellbeing of New Zealand.

These areas of need include New Zealand’s poor mental health outcomes, significant numbers of children living in poverty, the country’s high levels of greenhouse gas emissions, unequal growth and low productivity, and significant disparities across indicators of wellbeing between Maori and Pacific peoples and other ethnic groups.

Prime Minister Jacinda Ardern, who is the Minister for Child Poverty Reduction, said the Budget would continue New Zealand’s drive to be “the best country in the world to be a child”.

Starting with Budget 2019 every Budget Day will include a report on child poverty and several of the Budget’s measures were aimed at reducing child poverty.

Just over $1 billion (AUD 942 million) over five years has been provided to improve the wellbeing of Kiwi kids, including increasing funding to decile 1-7 schools that do not ask for donations from parents.

More than half of that $1 billion (AUD 470 million) will be spent on the indexing of major benefits to average wage increases which generally run above the rate of inflation.

There is a large range of measures to help children affected by domestic and sexual violence.  They include investment in new early intervention services, improved care services and a new service to help young people transition from care and foster homes and youth justice into adulthood.  At present these vulnerable young people are turned out onto the streets without help or safety net.  The new service will provide advice, assistance, 24-hour support and even the option of remaining in their foster home after the age of 18.

Major new investment is devoted to improving mental health and treating addiction.  At present mental health and addiction services are provided to those with the highest needs. People with emerging issues, or mild to moderate mental health or addiction needs, the “missing middle”, have largely been left on their own, or have had to wait too long to get help.

It is a major issue.  Studies show that at any time one in five New Zealanders experience mental health and addiction problems and in 2014 the estimated cost of serious mental illness alone was $12 billion (AUD 11.3 billion), or five per cent of GDP.

This Wellbeing Budget makes a heavy investment of $455 million (about AUD 430 million) to create new frontline services for mental health.

Thi new layer of services will put trained mental health workers in doctors’ clinics, Maori health providers and other health services so that people who reach out for help can see a trained mental health worker on site free of charge.

There’s more money for health clinics in schools, and mental health and addiction treatment for prisoners aims to help reduce reoffending.  In addition the budget provides for investment in low cost housing, the largest government investment ever in addressing chronic homelessness.

Domestic violence is at high levels in New Zealand.  Within the State care system, nine out of 10 children and young people have experienced a family violence incident in their lifetime.

Through the Wellbeing Budget process, eight government agencies have taken shared responsibility for this issue and developed a package of initiatives to address family and sexual violence.

The package includes sexual violence crisis support for children and young people and new ways for sexual violence victims to give evidence including video victim statements to reduce the risk of further trauma.

A new Intensive Intervention Service will use skilled support workers to help families with problems and there will be investment in more social workers and caregivers.

The Budget provides $47.6 million (AUD 45 million) to promote healthy eating and physical activity for children.

Data shows Maori and Pacific peoples score consistently lower in wellbeing measures relative to the general population including in income, education and housing.

Extra funding will support Maori families, improve the health of Maori and Pacific peoples and increase the teaching of Maori and Pacific languages in New Zealand.

There will be major changes to the treatment of Maori and Pacific prisoners.  Seventy-six per cent of high security prisoners identify as either Maori or Pacific and the reimprisonment rate of people released from high security is above 70 per cent.  Funds will be devoted to creating a more culturally oriented and Maori family centred justice system.

Climate and industry were dealt with in several linked budget initiatives which provided for ways to help businesses respond to technology changes and climate issues.  New measures aim to improve productivity and develop high value low-emissions products.  Start-up businesses will be helped.

Funding is provided for research into new ways to reduce emissions especially in agriculture.  A package of measures will support forestry including a programme to plant one billion trees and improve water quality in waterways.

The rail network will be a major beneficiary of the budget with a billion dollars (940 million) over the next two years.  The system has been stagnating, but the government said the funding boost will reduce emissions, ease traffic congestion, reduce road accidents and promote regional growth.

After ten years of under-investment the budget improves funding over longer terms for national infrastructure including large investments in school buildings and hospitals.

The budget provides for a defence purchase described in a Defence White Paper in 2016 detailing about $20 billion (AUD 18.8 billion) spending on defence equipment over the next ten to twenty years.  Four submarine hunter Boeing P-8A Poseidon aircraft costing $2.3 billion (AUD 2.1 billion) are in this year’s budget.  They will replace existing P3 Orions.

A number of measures respond to the terrorist attack in Christchurch in which 51 people died.  They include support for mental health services in the city, $50 million (AUD 47 million) more for spy agencies and $168 million (AUD 158 million) for the gun buy-back programme.

Most of the criticism of the budget is that it is unspectacular or not dramatically different.  This ignores the impact of the blanket application of the Living Standards Framework and the government’s determination to reverse some poor social outcomes resulting from ideological decisions made in recent decades.

The government doesn’t claim perfection in this first attempt at a Wellbeing Budget but it has begun to value, measure and improve many factors that make life worthwhile in New Zealand.  After years of promises New Zealand’s “Caring Society” may be dawning.

Max Hayton is a former journalist and political correspondent in New Zealand.

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