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New Zealand’s New Groundbreaking ‘Wellbeing Budget’ Raises the Global Bar

Prime Minister of New Zealand, Jacinda Ardern, visits NATO in January 2019. (Photo: NATO)
Prime Minister of New Zealand, Jacinda Ardern, visits NATO in January 2019. (Photo: NATO)

“What Jacinda Ardern is doing is groundbreaking, Ardern’s government is setting an example that the rest of the world can and should follow.”

New Zealand’s prime minister Jacinda Ardern and finance minister Grant Robertson released their government’s new “wellbeing budget” last Thursday, a spending plan that focuses on social outcomes rather than traditional metrics of economic growth like GDP. The plan has been hailed as a “groundbreaking” policy innovation by supporters, as it represents the first budget to explicitly name wellbeing as the foremost priority of public spending.

“We said that we would be a government that did things differently, and for this budget we have done just that,” Prime Minister Jacinda Ardern said. “Today we have laid the foundation for not just one wellbeing budget, but a different approach for government decision-making altogether.”

Although New Zealand’s economy has grown for 32 consecutive quarters in terms of GDP, around 27% of the country’s children live in poverty. High suicide rates, severe inequality, mental health problems and alarming domestic violence statistics challenge the notion of societal prosperity traditional measurements of economic success would suggest.

“Success is measured not only by the nation’s GDP but by better lives lived by its people,” said the prime minister.

Focusing on Wellbeing Goals

Five wellbeing goals will now guide new government spending: mental health care, the reduction of child poverty, support for indigenous peoples, thriving in a digital age, and transitioning to a low-emission, sustainable economy.

“If you’re not addressing one of those five priorities, you’ve got almost no hope of a budget bid being successful,” Arthur Grimes, an economics professor and former chairman of New Zealand’s central bank, told the New York Times.

Impoverished children will receive nearly $1 billion in new funding from the budget. “It could be a game-changer for New Zealand’s children,” said children’s commissioner Andrew Becroft.

“As the minister of child poverty, there is no ignoring the stress and strain that material deprivation causes our families,” prime minister Ardern said. “When our children do better, we all do better.”

Around $1.25 billion will be spent on mental health support, addressing rising numbers of self-harm hospitalizations and suicides in the Pacific nation. Ardern called the issue “deeply personal,” and explained, “Almost all of us have lost friends or family members. Ensuring that New Zealanders can now just show up to their GP or health centre and get expert mental health support is a critical first step.”

The new budget will also distribute $320 million to address New Zealand’s domestic violence crisis, ranked as one of the worst in the OECD.

Response to New Zealand’s Wellbeing Budget

“What Jacinda Ardern is doing is groundbreaking,” said Jason Hickel, an anthropologist at the London School of Economics. “Ardern’s government is setting an example that the rest of the world can and should follow.”

Critics fear the move away from economic growth is misguided, and argue the country’s prosperity is what enables it to engage in ambitious social programs in the first place.

“I think this Well-Being Budget is nothing else than a public relations operation. This budget means the government does not care about economic growth and this is a worrying and dangerous development,” Dennis Wesselbaum, the director of foreign policy at Otago University, told the Huffington Post.

“This is not a wellbeing budget. Most New Zealanders will be left asking themselves what’s in it for them. Families want more money in their weekly budgets for food, petrol and rent,” said opposition National party leader, Simon Bridges.

Others, such as Jason Hickel of the London School of Economics, argue nations need to focus on distributing their wealth after reaching a certain level of prosperity. “Past a certain level, which rich nations like New Zealand have long since surpassed, this relationship [between GDP and well-being] no longer holds,” Hickel told the Huffington Post.

Billionaire entrepreneur Richard Branson was among the most enthusiastic supporters of the new budget, tweeting, “New Zealand has announced a ‘wellbeing’ budget, promising to provide billions to care for the country’s most vulnerable people. A brilliant blueprint for the rest of the world.”

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Peter Castagno

Peter Castagno is a freelance writer with a Master’s degree in International Conflict Resolution. He has traveled throughout the Middle East and Latin America to gain firsthand insight in some of the world’s most troubled areas, and he plans on publishing his first book in 2019.

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