Rethinking value: the wellbeing approach

18 Jun 2019


Last month, New Zealand’s Minister of Finance, Hon Grant Robertson, delivered the country’s annual budget. Just another day in the office. Nothing particularly noteworthy about that, surely.


Why, then, did the New York Times describe the 2019 budget as a “liberal milestone” and “a beacon in increasingly populist times”? Similarly, a Washington Post columnist called the budget “a signpost for other modern governments” and “a major step.” Why such hype?


This was a budget like no other, setting not just a precedent for New Zealand but for the whole world. This was the country’s first ‘Wellbeing Budget’.


What’s a wellbeing budget?


For the first time ever, in New Zealand, success is not to be measured by GDP alone, but by a far broader range of indicators.


Last year I wrote a piece for Backbench gently mocking the material goal of GDP, suggesting that we move on from this narrow focus. I suggested that success is about much more than wealth alone and that value can be measured by much more than solely financial metrics.


In this piece, I characterised GDP as a boyfriend who might spoil you with gifts, but not care about your happiness, your mental health, your wellbeing, and your personal fulfilment. I suggested that it might be better to break up with GDP than to cling on to this unfulfilling relationship.


In New Zealand, this time has come to pass. We have finally ended our toxic relationship with GDP.


Now, I must be clear: New Zealand is in no way, shape, or form abandoning GDP as a measure of success. Rather, the country has adopted a far broader range of indicators, following work by the New Zealand Treasury to create a Living Standards Framework (LSF) to “compare indicators of wellbeing” across twelve domains from civic engagement and governance to health, safety, social connections, and (of course) income and consumption.


While the 2019 budget was the first to adopt the wellbeing approach, and so we cannot know what the results will be, this approach might yet be a remedy for the increasing economic and social polarisation of society. The approach promises to refocus our fixation on the GDP race toward the wellbeing of society as a whole, and across all its domains — natural, human, social, and financial and physical (the four ‘capitals’ of the LSF).


Of course, the budget has been criticised as more rhetoric than substance. Meanwhile, the government’s opposition were sceptical of how a $20bn defence spending plan fits the wellbeing mantra, instead suggesting that the budget is merely a continuation of the same-old approach but with new branding.


Whatever the motivations for such criticism, the debate is valid. It has also been argued by many commentators that the Wellbeing Budget does not actually go far enough, resembling instead a continuation of the present approach more than it does a visionary, fundamental shift in thinking.


Similarly, it is not wrong to suggest that the wellbeing approach “as an organising principle for policy … begs as many questions as it answers.” This is just the beginning of a much-needed conversation, and we must recognise it as such.


The biggest embarrassment of all, however, was that the mother and daughter on the budget’s cover have in fact moved to Australia because the cost of living in New Zealand has simply become too high. A faux pas for sure, but too many in New Zealand have been keen for this awkward miscalculation to distract from the real conversation that needs to be had.


Acknowledging such criticism, we can still argue that the wellbeing approach represents the start of something new. Rome, as we all know, wasn’t built in a day.


This is just the very beginning of a new way of thinking about value and success. The first step in the right direction. Moreover, it is important that this conversation is not limited to New Zealand, as many have recognised.


In the UK last month, the All Party Parliamentary Group (APPG) on Wellbeing Economics argued in a report that “wellbeing rather than economic growth should be the primary aim of government spending.” It is time for the ball to start rolling in the UK, too. After all, Corbyn’s 2017 success — which appealed to the needs of the ‘many’ rather than the ‘few’ — can be seen as an acknowledgement that too many people are simply feeling left behind, regardless of whether national standards of living continue to increase on paper.


Similarly, in a letter last month, 200 academics other experts wrote that what Europe needs is “system change,” “an end to … growth dependency,” and a shift towards planning for “a post-growth economy.” After all, GDP growth is not limitless.


The conversation needs to be had, and the conditions for it are ripe. So, let’s talk about what value is. Let’s talk about what it means for individuals, communities, and societies to be successful. Let’s talk about what wellbeing means, and let’s be honest about the dangers of a fixation on GDP growth and the inequality this can cause.


Whether or not Mahatma Gandhi really did say that “a nation’s greatness is measured by how it treats its weakest members” is besides the point. Whoever said this was right, and it’s time we got real about it.

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