Government's wellbeing focus a work in progress, says Grant Robertson

Finance Minister Grant Robertson. Photo / File

The future of work, climate change and inequality are the "defining economic and social issues" for the Labour-led government, Finance Minister Grant Robertson told a three-day international conference on wellbeing economics, but the wellbeing focus it brings to those challenges remains a work in progress.

Opening the conference at Parliament this morning, Robertson said the government's determination to use a wellbeing focus in tackling those problems reflected its belief that "we cannot hope to make the best choices for future generations about mitigating climate change or ensuring a just transition to a low carbon world if we do not look at environmental, social and economic implications together".

"The complex, messy problems that create poverty and inequality require us to look beyond basic economic issues, as essential as they are to solving them, to the wellbeing of our wider communities, the impacts of cultural alienation and our understanding of what makes for security and hope," he said.

However, he indicated that while the 2019 Budget would be the first to use a 'wellbeing framework', it would be a work in progress.

"My aim is to deliver New Zealand's first wellbeing Budget," he said, but that "implies and requires a rigorous framework", which was still in development.

Not only are the Treasury and Statistics New Zealand only now working on a set of indicators to allow reporting on wellbeing through a Living Standards Dashboard, but Robertson indicated there are still deep cultural and political considerations to apply to ensure the wellbeing approach adopted.

"It is clear that there are information gaps and there will be proxy indicators or, indeed in some cases, no indicators at all while better data is identified or created. The framework and our wellbeing approach must continue to evolve.

"There are significant challenges. The biggest among those for me is making sure that the approach genuinely reflects Aotearoa New Zealand and our values."

That meant including a Maori worldview and taking into account the values of the substantial New Zealand Pasifika community.

"A common criticism of the framework is that it does not encapsulate a world view that is more collectivist, and where concepts of value are not so easily separated into clearly defined capitals or disaggregated wellbeing domains," he said.

"Some interesting ideas are emerging that actually help to draw together the notion of wellbeing. One example draws on a tikanga Maori concepts such as manaakitanga (care/respect), kaitiakitanga (guardianship or stewardship) and whanaungatanga (connectedness and relationships) to draw together into waiora or wellbeing."

Among the issues Robertson said needed further exploration were: how to weight the relative merits of each of the four sources of capital - natural, social, environmental, and economic; how to develop traditional cost benefit analysis to incorporate wellbeing and "conceptual challenges to the framework including the underlying assumptions of grounding it in traditional economic concepts".

"The word 'capital' itself is so value-laden that even used in its literal form (an accumulation of value) it causes concerns," he said. "But it is important that the framework is rigorous and grounded."

There were also questions about the "underlying assumptions within the measurement of capitals".

"For example the continued use of the System of National Accounts and its undervaluing of so-called 'unpaid work'. Can the framework truly provide an adequate gender analysis in this respect?" said Robertson.

The first detailed demonstration of how the Living Standards Framework would be incorporated into Budget documents would emerge in December, when the government would produce its 2019 Budget Policy Statement.