If the Government is serious about redirecting policy towards wellbeing, it is going to have to do a lot more than making the odd statement in the budget.

On the Friday morning previous to Budget Thursday, the Prime Minister gave what amounted to a pre-budget speech. It was not welcomed by the listeners, even though most New Zealanders may have found it promising But the audience was from the Auckland Business Community (ABC) and the speech gave little acknowledgement to them or their concerns.

It would have been so easy to have inserted something like: ‘I want to assure you that we need a thriving business sector in order to deliver our wellbeing goals’. But the audience left without this message. I do not know whether the intention was to be deliberately dismissive of business – as sometimes the Clark-Cullen Government was – or whether those who drafted the speech for the PM overlooked or were ignorant of the audience.

Yet the key message in the Minister of Finance’s budget speech shows there is a tension between the crude aspirations of many businesses and the Government’s concerns. The speech comments ‘[i]n the election that led to the formation of this Government, New Zealanders were asking a core question: If we have declared success because we have a relatively high rate of GDP growth, why are the things that we value going backwards, like child wellbeing, a warm, dry home for all, mental health services or rivers and lakes that we can swim in?’

One is reminded of the Brazilian colonel of the 1970s who, having seized power and implemented Chicago School policy recommendations, said that ‘the economy is doing well, but the people are not’.

The budget message got lost in the trivia of post-budget commentary; I did not see one reference to it (but, of course, I have not read everything). Nor was the commentariat helped by the failure to repeat the message at the end of the budget speech.

Perhaps I am wrong, perhaps the bit I have highlighted from the budget is not at the forefront of the Government’s thinking and ‘wellbeing’ is a slogan rather than a direction. This column assumes I am right, but who knows?

The difficulty the government faces, as Jacinda Ardern found on that Friday, is that there is a conflict between  the way the business audience thinks and acts and the one which the Government seems to be advocating. I have set out this theoretical conflict in an earlier column. Here I want to talk about its politics.

Just before the budget I talked to Bryan Crump on RNZ Nights, illustrating the issue using the example of mental health treatment, which the government had signalled as its first priority. In a wellbeing approach it does not matter whether treatment adds to GDP (material output) above the costs of the program. Effective treatment will add to the nation’s wellbeing.

The previous government apparently decided that additional mental healthcare would not give a narrow economic return and so did not give mental health any priority. They may well be right about the output benefits but, to repeat,  an effective mental health treatment program may be costly but it is justified in wellbeing terms.

Even the Minister of Finance gets a bit trapped when he says spending on this or that is an ‘investment’. When those working in the wellbeing sectors realised that we were obsessed with economic growth as a goal, they reframed their case for more funding by claiming that spending was really an investment, the return from which would boost GDP. One consequence of the terminology is that some of the spending got distorted from its wellbeing purpose towards an economic one.

A good example is the Hawke report on Post-compulsory Education and Training in the Rogernomics era which said we should not discriminate between education and training. That meant that educational purposes have got largely lost and the primary concern of tertiary institutions is to train people for the economy.

You will notice that despite the long build-up, the public interest in the budget disappeared within a couple of days. Partly that is because of the pursuit by the commentariat of what amounts to trivia. I did not see anyone mention that there was $1.5 billion of unallocated expenditure to be spent before June 2020. That is because only spending agreed by the Cabinet appears in the budget. There will be more decisions throughout the next year. Meanwhile, informed observers will be wondering about the size of the income tax cuts and benefit increases for the following (election) year.

And while I am grumbling about the ineptitude of the commentariat, they forget that generally budgets do not repeat earlier policy announcements, so we had greedy pressure groups complaining that they were not getting more from the budget even if they had benefited from major spending measures which had been announced already.

Does that mean that the interest in wellbeing is going to fizzle out – that it is a slogan rather than a strategy? The outlook is not promising unless the government takes new initiatives; banging on about it in their speeches is not enough.

Especially as the default is the material output strategy. The public’s rhetoric is framed by it. And while business will not be overtly antagonistic to a wellbeing goal, recall that not only did it welcome the more business-oriented Key-English Government (which never had the lapses which were in the Ardern speech to the ABC) but it also covertly contributed to its election.

Moreover, there are national institutions which are committed to the output paradigm although, to give it credit, Treasury has been trying to break away. The Key-English Government established the Productivity Commission whose remit reeks of the dominant output paradigm.

I suppose the government could rename it the Productivity and Wellbeing Commission, but it would need to do more than that because otherwise the Commission will continue with its output framework. (When it has been given a topic that touched on wellbeing, it has generally handled it very badly.)

While the rigorous thinking which underpins wellbeing has been around for many decades (recall the 1970s comment by the Brazilian colonel) it has hardly reached New Zealand academia or those they have taught.

We shall watch whether the Government takes any further initiatives to bed wellbeing into its policy and the nation’s thinking. If it does not, it will just be a budget slogan rather than transformational.

Footnote

A few days after the Budget the Queen’s Birthday honours were announced. On my count, about a third went to people working in wellbeing sectors – frequently without payment. My estimates exclude those who have enhanced wellbeing in arts, sports or in the normal course of their work.

PS. Prioritising mental health treatment does not mean we should neglect prevention. There is some easy fruit, such as preventing Foetal Alcohol Spectrum Disorder (FASD) by discouraging pregnant women from drinking.

Comments (3)

by Ross on June 08, 2019
Ross

It would have been so easy to have inserted something like: ‘I want to assure you that we need a thriving business sector in order to deliver our wellbeing goals’. But the audience left without this message. I do not know whether the intention was to be deliberately dismissive of business – as sometimes the Clark-Cullen Government was – or whether those who drafted the speech for the PM overlooked or were ignorant of the audience.

There could be several reasons - inserting such a comment may have appeared insincere or cynical. Or such a sentiment may have been implied by the content of the speech.

https://www.beehive.govt.nz/speech/pre-budget-speech-business-new-zealand-0

There is some easy fruit, such as preventing Foetal Alcohol Spectrum Disorder (FASD) by discouraging pregnant women from drinking.

Doesn't that already happen? Discouraging someone from doing something isn't the same as someone changing ther behaviour. I think the dangers of smoking and drinking have been well publicised over many years. The idea that a pregnant woman doesn't know the possible consequences of both is hard to comprehend. But there will be some who, even though they know the consquences because they have been told them, will not be inclined to change their behaviour.

by Ross on June 08, 2019
Ross

There's also the fact that some within the business sector acted almost hysterically in their criticism of the government's proposed employment law changes. The criticism of the change to the 90 day trial was especially weird, especially given the previous (National) government introduced the law and initially stated that it would apply to small employers only. (Then PM John Key said employers hiring someone straight from school or prison needed protection, so why are many experienced employees who have never been to prison signed up to such a trial?) Indeed there's a strong argument that 90 day trials should be abolished completely.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=121...

Business New Zealand were highly critical of a possible capital gains tax.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=122...

So yeah, if I were cynical, I could see why the PM may not have been keen to insert the comment you referred to. Given that there's a certain antipathy between both parties, a compliment from the PM likely would  have appeared insincere.

by william blake on June 09, 2019
william blake

The coalition is between the devil and the deep blue as far a spending goes, the problem being the difficulty of addressing issues outside of the productive sector while still keeping an eye on GDP, because 'blowing the budget' in relation to GDP would give Simon Bridges something to moan about ad infinitum. Attacked by the left for not doing enough and attacked by the right for spending too much in the 'wrong places.'

Im with Ganesh Nana and Jane Kelsey in saying that substantive change (revolution) won't happen until the finance act is repealed and Government takes charge of the economy, for all New Zealanders.

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