The Transformative Potential of New Zealand’s Well-Being Economics - Australian Fabians Former Site - For Page Transfers

The Transformative Potential of New Zealand’s Well-Being Economics


15 May 2019
Economy and Tax

New Zealand's Labour Finance Minister has deemed his government's upcoming 2019 budget to be New Zealand’s first ‘Well-Being Budget’, based on data and goals set through their ‘Living Standards Framework’. Charlie Joyce here argues that such a well-being budget is an example of social democratic theory in practice, and advocates the adoption of such a model and standards by a future Shorten-led Australian Labor Government, with its emphasis on 'Well-Being Economics'. Charlie is a member of the Victorian Labor Party and is on the executive of the Victorian Fabians.


On the 30th of May, New Zealand’s Labour-led coalition government will deliver its 2019 budget. This budget will defy conventional economic wisdom by defining its goals not in purely material macroeconomic outcomes, but rather will measure its goals through the prism of the recently-created ‘Living Standards Framework’ (LSF). Based on the data collected through the LSF, Labour Finance Minister Grant Robertson has deemed this budget New Zealand’s first ‘Well-Being Budget’.

While this is by no means a revolutionary development – governments and organizations have long sought to measure the social outcomes of their policies – the act of explicitly stating that a nation’s economy should be used to further the development of society heralds a triumphant return for social democratic economics in New Zealand. With a Bill Shorten Labor Government expected in Australia in less than a week, it also provides an example as to how a Labor-led treasury should act.

The New Zealand Treasury states that the LSF assesses economic activity by measuring the ‘Four Capitals’: human capital, social capital, natural capital and, finally, financial and physical capital. It contains 38 indicators of well-being, sorted into 12 well-being ‘domains’ that include, as well as traditional economic indicators, ‘Civic Engagement’, ‘Cultural Identity’, ‘Environment’, ‘Time Use’ and ‘Subjective Well-Being’. These indicators not only show the different measures of national well-being, but also show disparities across different age and population groups. They thus illuminate the high levels of inequality of outcomes faced by different sections of the New Zealand population.


Based on the Living Standards Framework, Finance Minister Grant Robertson has listed 5 priorities for his ‘well-being budget’:

  • transitioning to a sustainable and low-emissions economy
  • boosting innovation, and social and economic opportunities in a digital age
  • lifting Māori and Pacific Islander incomes, skills and opportunities
  • reducing child poverty, improving child well-being and addressing family violence
  • supporting mental well-being, with a special focus on under-24-year-olds.


None of these priorities mention budget surpluses, GDP growth or taxes. Contrast this with Australian Liberal Treasurer Josh Frydenberg’s 2019 budget, the priorities of which were outlined as: “restoring our nations finances”, “strengthening our economy” and “tackling cost of living”. While the final point is important, the ambiguous platitudes of the first two priorities show an utter dearth of imagination and a dismissal of the real experience of the Australian people.

This is not the first time that treasuries have framed their budget priorities through social goals. As Arthur Grimes recently wrote in The Conversation, Conservative UK Prime Minister David Cameron and Liberal Australian Prime Minister John Howard both sought to outline how their budgets would further national well-being. Moreover, the LSF was in-fact commissioned in 2011, under the conservative National Party John Key government. Nevertheless, these governments went on to dole out the same neoliberalism and austerity that have been shown over the past 40 years to only diminish standards of well-being.

The Labour-led New Zealand government has the potential to go far further than just gesturing towards more holistic economic priorities. The comprehensive and far-reaching nature of the now-completed Living Standards Framework entails the potential for a government to assess the well-being outcomes of its citizens, both individually and collectively. The Labour government has both the means and the mandate to deliver a true well-being budget, one that fulfills the age-old social democratic promise of subjugating the economy to a democratic society.

For the first time in over 40 years, global socialist and social democratic movements are moving back into the political mainstream. Many are now asking how current and future progressive governments should seek to reject the prevailing but failed neoliberal order. The well-being budget may well be a good starting place.

Within a week, Australia will likely have a new Labor Government. While the party platform does not go as far as rejecting neoliberal and market-rational dogmas, as many of us on the left would have liked, it opens up the possibility to go much further, and may yet be the beginning of a rejuvenation of social democracy in Australia. At the party campaign launch, Paul Keating put it bluntly: “the economy is there for society”. If a likely Chris Bowen-led treasury seeks to truly undo the damage of decades of Liberal-led neoliberalism and austerity, he should follow the advice of his mentor, as well the example of our cousins across the ditch.

Well-being economics heralds the return of social democracy in New Zealand, and it will hopefully serve as an example in our efforts to return it to Australia. As UK Labour leader Jeremy Corbyn recently eloquently put it, “the economy must be a tool in our hands, not a master of our fate”.

Charlie Joyce

May 2019


The Fabian society was founded in 1884 by Edward Pease, Frank Podmore, and Hubert Bland, joined later by Bernard Shaw and Sydney Webb. In Australia, the first Fabian group was formed in 1891; the now Australian Fabian society is a national organisation.

The Fabian tradition is one of achieving social progress through research, education and debate. The Society has no policy beyond that implied in a general commitment to social democracy, and issues its publications as the opinions of their authors not of the organisation. The publishing program is designed to promote informed discussion on issues to further the goals of social democracy.


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