New Zealand is aiming to adopt a wellbeing economy approach in its economic policy. The Government, for example, presented the world’s first Wellbeing Budget to Parliament on 30 May 2019.
Against that background, Paul Dalziel and Caroline Saunders prepared a Research Briefing in September 2020. It summarises lessons learned in the initial New Zealand experience with the wellbeing economy approach. The authors are the Deputy Director and Director of the Agribusiness and Economics Research Unit at Lincoln University, New Zealand.
You can access the Research Briefing from the Lincoln University archive here.
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Kia ora! I’m Suzy Morrissey, one of the founders of the Aoteraroa New Zealand WEAll hub, and I recently gave ‘evidence’ to a special meeting of the UK All Party Parliamentary Committee (APPG) on the Green New Deal and the APPG on Limits to Growth.
The Green New Deal APPG was established to provide a cross-party platform for the development of a transformative Green New Deal for the UK and the Limits to Growth APPG is a platform for cross-party collaboration on shared and lasting prosperity in a world of environmental, social and economic limits. The APPG members are MPs and Peers and the session was chaired by Caroline Lucas MP and Clive Lewis MP.
I was invited to present ‘evidence’ for the consideration of the members of the APPGs ahead of the UK budget announcement, along with Lord Adair Turner (Institute for New Economic Thinking), Miatta Fahnbulleh (New Economics Foundation), and Robert Palmer (Tax Justice UK). The virtual session was also open to the public and over 100 people participated in the session.
In my evidence, I explained the limitations of using GDP to measure wellbeing, outlining how it ignores important elements and rewards negative behaviors. For example, unpaid work is not included in the calculation of GDP, but the sales of weapons are. Further, no adjustment is made for activities that negatively impact the planet, such as pollution or non-recyclable waste.
I also shared an example of an alternative approach from Aoteraroa New Zealand. The ‘Living Standards Framework’ measures wellbeing, using a stocks and flows based economic model, and a dashboard of elements. It draws on the OECD’s Better Life Index, with domains of current wellbeing (such as income, health, housing), and four capitals (natural, social, human, and financial and physical). The Living Standards Framework was devised by the NZ Treasury, to improve the quality of its advice, and provide a focus on inter-generational equity.
Shortly after the Labour-led coalition Government came into power at the end of 2017, they announced their intention to use the Living Standards Framework as a base for the world’s first ‘Wellbeing Budget’ in 2019, as well as to inform the 2018 Budget.
I worked at the NZ Treasury as Principal Advisor in the Office of the Chief Economic Advisor and was the policy and engagement lead for the Living Standards Framework. I shared my experience of determining the current wellbeing domains and capitals and finding suitable indicators to measure them . For example, although much of the Living Standards Framework draws from the OECD Better Life Model, we decided to include a new domain of current wellbeing called ‘cultural identity’ to measure features unique to Aotearoa (such as use of Te Reo Māori, the language of our first people). We also included ‘time use’ because it is so important, especially for gender analysis, even though it had been ten years since a national time use survey had been conducted by Stats NZ. Data gaps need to be highlighted so that they can be addressed.
I also discussed how the Living Standards Framework was applied by government to identify priority areas for the budget and to assess potential policies for funding. An initial assessment of wellbeing was undertaken using the measures and then ‘bids’ for funding from the national budget were assessed against the domains and capitals they were intended to improve.
I was delighted to be able to share Aoteraroa New Zealand’s world-leading work in bringing wellbeing economics to public policy.
Now my focus is back on building the Aoteraroa New Zealand WEAll hub and sharing the wonderful WEAll resources for policy makers and businesses on how to create a wellbeing economy. Contact myself, Paul, or Justin (emails on the Hub page here) if you would like to get involved.
You can watch the full APPG session below or on YouTube here:
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The former Chief Economist of The Treasury in New Zealand has written a book examining the processes by which wellbeing-focused public policy objectives can be established, prioritised, funded, implemented, managed, and evaluated.
Professor Girol Karacaoglu is Head of the School of Government at Victoria University of Wellington and was previously New Zealand’s Chief Economist of The Treasury. Before then, he was the Chief Executive of PSIS (then Co-operative Bank of New Zealand) for nine years. His new book asks:
HOW WOULD WE DESIGN, IMPLEMENT AND EVALUATE PUBLIC POLICY IF IT WERE BASED ON OUR LOVE FOR FUTURE GENERATIONS?
For the philosopher Water Kaufman, ‘I love you’ means:
I want you to live the life that you want to live. I will be as happy as you if you do; and as unhappy as you if you don’t.
Professor Karacaoglu said that ‘wellbeing is about the ability of individuals and communities to live the lives they value – now and in the future. This is their human right. It would be extremely unjust to prevent the enjoyment of lives centred on chosen values. Preventing such injustice across generations should be the focus of a public policy that has intergenerational wellbeing as its objective.’
‘Half of the net revenue from sales of this book will be donated to The Nest Collective, which gives baby and children’s essentials to families in need’, he said.
Tuwhiri publisher Ramsey Margolis said that ‘while humanity may well come to grips with the current pandemic in the foreseeable future, ballooning inequalities and injustice threaten to shred the fabric of our societies, and the climate emergency menaces all life forms on the planet.
‘In the face of these enduring humanity-induced catastrophes, we owe a special duty of care to future generations to overcome them, and to leave our successors with a safer, fairer world in which they may thrive. We need to express our care for coming generations in many ways, from changing own personal lifestyles, to choosing political representatives who advance cogent, long-sighted policies in aid of a better world.”
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A major report published this week calls for the Scottish Government to introduce wellbeing budgeting to improve lives for children as part of a radical systems change in the wake of the coronavirus.
The new report, Being Bold: Building Budgets for Children’s Wellbeing, by WEAll Advocacy and Influencing lead Dr Katherine Trebeck, with Amy Baker, was commissioned by national charity Children in Scotland, early years funder Cattanach and the Carnegie UK Trust.
It makes a series of bold calls focused on redirecting finances to tackling root causes of inequality and poverty as Scotland emerges from Covid. Key recommendations include:
A post-Covid spending review, with all spend proposals assessed against evidence of impact on children’s wellbeing
Training of the civil service to ensure effective budget development and analysis, and moving to multi-year budgeting aligned with wellbeing goals
Establishing an independent agency, modeled on the Future Generations Commissioner for Wales, to support activity and scrutinise effectiveness of delivery of wellbeing budgeting by the government
An overarching change to the ways of working in the Scottish Government budget process to ingrain greater transparency; cross-departmental working; and a participatory approach involving the public and the diversity of children’s voices.
The report argues that the Scottish Government’s stated aims of improving wellbeing across society and addressing the fact that one quarter of children live in relative poverty cannot be met unless we create conditions for our youngest children to be healthy and supported from the outset.
To do this, it makes the case for directing funds at root causes that diminish child wellbeing, rather than targeting symptoms ‘downstream’, which is inefficient, stifles implementation of policy and legislation, and slows ambitions for societal change.
First steps towards wellbeing budgets would involve holding a conversation with the public about budget-setting to absorb lived experience; interrogating data to ‘map’ the distribution of wellbeing in Scotland; and ensuring policy development was properly connected to evidence on what would actually change outcomes for children and addressing the root causes of what undermines their wellbeing.
The report’s lead author, Dr Katherine Trebeck, said:
“If the Scottish budget is to be a mechanism that brings about change, we need to create a context where children can flourish in Scotland. Then we need to think about a few fundamentals. The budget needs to be holistic, human, outcomes-oriented, and rights-based. It needs to be long-term, upstream, preventative and precautionary. Finally, a bold budget for children’s wellbeing needs to be participatory – children’s voices in all their diversity need to be at the heart of setting the budget agenda.”
Katherine speaks about the report in more detail in this short video:
Sophie Flemig, Chief Executive of Cattanach, said:
“This report shows why it is necessary to set out a high-level vision for wellbeing outcomes and hardwire it into government processes. Countries need to acknowledge that the economy is in service of wellbeing goals, not a goal in and of itself. Meaningful public involvement is key. Ministerial responsibility for wellbeing outcomes drives progress. And cross-departmental work is essential for success.”
Jennifer Wallace, Head of Policy at Carnegie UK Trust, said:
“This project has focused on one important lever of change – the finance system, the way that we think about money and spend in Scotland, asking: what is value for money when we’re talking about our children’s lives? We know it’s not a silver bullet, but we do think it’s important that we consider how we spend that money if we’re going to begin improving outcomes for children and putting our money where our mouth is when it comes to children’s wellbeing.”
As the election campaign approaches, and following Tuesday’s vote to incorporate the United Nations Convention on the Rights of the Child into Scots law, the report’s calls and the case for wellbeing budgeting informs Children in Scotland’s manifesto for 2021-26, backed by organisations across the children’s sector.
The report is published as Scotland takes stock of the damage the pandemic has done to individuals, families, communities, and the macroeconomy, and an increasing number of people recognise that we must not revert to pre-Covid ways of working.
Jackie Brock, Chief Executive of Children in Scotland, said:
“Now is the time for us to reset our economy and the way in which we prioritise our budgets. Katherine’s work gives us a real manifesto for how we will secure children’s rights and wellbeing. We call on you to read the report, particularly the section which identifies what the crucial next steps are. We don’t need any more research or evidence – we need to work together to put a budget for Scotland’s children into place, this year, and we look forward to working with you to make that happen.”
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