New Zealand’s wellbeing budget ‘heralds public sector transformation’

29 May 18

New Zealand will transform the way its public sector works together when it brings in the world’s first ‘wellbeing budget’, a Treasury official has told PF International.

The centre-left coalition government, which came into power at the end of last year, will use the Treasury’s wellbeing indicators to decide where to allocate money in the 2019 budget.

Speaking to PF International, Suzy Morrissey, a team leader at the Treasury, said New Zealand’s ministries will have to work together in a new way to “draw a wellbeing link” between departments, such as health, education and housing, all of which have an impact on wellbeing.

She said: “I think the real change is for the public sector as a whole to work in a more cohesive collaborative manner.”

The ministries will all have to “look a little bit further” and “think a little differently” in order to consider the impacts of their policies and links to other departments, Morrissey added.

The New Zealand Treasury has been working on the Living Standard Framework since 2010, which is used to measure the country’s wellbeing and the impact of various policies.

New Zealand will be the first country in the world to use such indicators to allocate spending, in what it has called a wellbeing budget.

The Treasury’s framework goes beyond the normal cost-benefit analysis that other countries look at when assessing policies, Morrissey said.

“Often this conversation is strictly financial, so the Living Standard Framework includes both the financial aspect as well as the environment and the impact on individuals and society,” she said.

Morrissey, who will discuss the wellbeing budget at the OECD Forum today, said a ‘dashboard’ would be introduced to measure how the indicators are doing.

The Treasury is consulting on the exact nature of the dashboard over the coming months.

Other countries have also introduced a new form of issue-focused budgets. France is currently working to implement a green budget and Canada last year issued its first gender budget analysis.

The wellbeing budget will also capture gender and climate issues, as there are wellbeing indicators that address these areas.

“With countries signing up to international agreements [such as the Paris Agreement], there is a natural tendency to look domestically at how policies are doing and where you can make improvements,” Morrissey said.

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