On 30th May 2019 Grant Robertson presented the Government’s budget for 2019/2020. Like all good Budgeteers before him, most of the good news has been well and truly published beforehand. Including leaking of some key announcements by the opposition a few days ago. More interesting is that Treasury have confirmed it consulted with Sir Michael Cullen on post budget proposed changes moving towards what Newsroom describes as “stewardship” approach to public finance and the public sector. We can expect significant changes in how Treasury and agencies report and what they report on.
A ‘Wellbeing’ budget
Earlier on 13th February Mr Robertson said “this year’s Budget will be the first to use the Coalition Government’s new Wellbeing approach, evidence-based framework used to identify the Budget priorities and then assess which Budget bids should be accepted. This means Ministers and departments are focussed on developing Budget bids and policies which will deliver outcomes that will make real improvements to New Zealanders’ wellbeing.”
So, what does a ‘wellbeing’ budget look like? The Government has built its budget around five priorities.
1. Creating opportunities for productive businesses, regions, iwi and others to transition to a sustainable and low-emissions economy.
2. Supporting a thriving nation in the digital age through innovation, social and economic opportunities.
3. Lifting Maori and Pacific incomes, skills and opportunities.
4. Reducing child poverty and improving child wellbeing, including addressing family violence.
5. Supporting mental wellbeing for all New Zealanders, with a special focus on under 24-year-olds.
These priorities were developed using the Treasury’s Living Standards Framework (LSF), evidence from sector-based experts and the Government’s Science Advisors, and through collaboration among public sector agencies and Ministers.
The Prime Minister said in her speech to Business New Zealand on 24th May that the Government looked at these five priorities through a different lens.
They asked “three big questions”:
· is the Budget bid intergenerational? Will it make a difference now and for the lives of our children, grandchildren and beyond?
· does it move us beyond the narrow measures of success to take a wider set of factors into consideration?
· and, finally, is it a whole of Government approach? For too long policies and initiatives have operated in isolation, sometimes with overlapping work and other times resulting in gaps in policies.
Minister Robertson in his budget paper referred to “the wellbeing of New Zealanders at the heart of what we do. This approach represents a significant departure from the status quo. Budgets have traditionally focused on a limited set of economic data. Success has been declared on the basis of a narrow range of indicators, like GDP growth. But New Zealanders have questioned that claim of success when they have seen other things that we hold dear – child wellbeing, a warm, dry home, or being able to swim in our rivers and lakes – getting steadily worse. The old ways have left too many people behind. It is time to change.
New Zealanders want us to measure our success in line with their values – the importance of fairness, the protection of the environment, the strength of our communities. That is what this Wellbeing Budget sets out to do.
In this first Wellbeing Budget our priorities are tackling long-term challenges facing New Zealand. We're taking mental health seriously, addressing child poverty and domestic violence, supporting Māori and Pasifika aspirations, transforming our economy and building our productivity. Alongside them we are balancing the need for fiscal sustainability for future generations and making long term infrastructure investments, such as in our schools and hospitals, and supporting the economy.”
Mr Robertson ended his speech with this:
In 1968 Robert Kennedy bemoaned the limits of GDP in a well quoted speech. In it he concluded that it “measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything in short, except that which makes life worthwhile.”.
You can find the wider quote here which references the quality of our children’s health and the quality of their education, the intelligence of our public debate and the integrity of our public officials.
The nuts and bolts of the announcements.
You can follow this link to read more, but here is our summary of the key spending:
· TAKING MENTAL HEALTH SERIOUSLY by funding more front line workers, targeting suicide prevention, more nurses in schools and tackling homelessness.
· IMPROVING CHILD WELLBEING– specialist services for prevent family and sexual violence, supporting young adults transition out of state care, increasing funding in decile 1-7 schools if these schools don’t ask for parental donations, and indexing benefits to inflation.
· SUPPORTING MĀORI AND PASIFIKA ASPIRATIONS – increasing spending for Whānau Ora, supporting languages, additional places for student employment and a $12m programme targeting rheumatic fever.
· BUILDING A PRODUCTIVE NATION by creating a $300m business start up fund, innovation to reduce carbon emissions and boost to apprentices and trade training
· TRANSFORMING THE ECONOMY – over $1b in spending for KiwiRail, helping farmers with climate change through innovation research, encouraging sustainable land uses, and improving water quality.
· INVESTING IN NEW ZEALAND by allocating $1.7b into hospital buildings, a 10 year building plan for schools, free Bowel screening rolled out to 5 more DHB’s and $2.9m for DHB’s.
Commentators are talking about this as a “join the dots” budget. Funding is being appropriated to collective objectives, which will be delivered collectively by different Government agencies. How will these agencies be able to co-ordinate between themselves, and share the resources available? There is a lot of what is going to be done, not who it is going to be delivering it and how. No doubt details to follow over the next few months.
Giles Beckford, from Radio New Zealand, referred to this budget as “warm” and that the public will not know for at least two years if these goals are being achieved. Whereas Bryce Edwards reports this is a status quo budget and not the transformation budget promised with lots of words around “wellbeing” and social capital, but does not deliver much after taking into account inflation and population growth.
The Individual v The State
As we contempt the budget and its ramifications our mind drifts back to the works of John Stuart Mill. Mill's view on liberty was that the individual ought to be free to do as she or he wishes unless that harms others. Individuals, he argued, are rational enough to make decisions about their own well being. Government should interfere when it is for the protection of society. However, Government cannot care for the wellbeing of the individuals without impinging on the freedom of others (particularly by imposing taxes). As taxpayers, we need to hold the Government to account to invest in New Zealand as a whole. If that means supporting those who need it, we’re happy(ish) to do so. But the Government also must be effective and efficient in carrying out its duties. We wait to find out whether multiple Government agencies can work collectively for the collective good without wasting money on shifting the deckchairs.