Jacinda Ardern, Prime Minister of New Zealand addressed the United Nations in 2019 pleading for more kindness in politics. She also made a bold pledge, stating that New Zealand would become a country where “success is measured not only by the nation’s GDP but by better lives lived by its people.” While it sounds more like a hope than a policy, her “Well-Being Budget” shows she is in earnest. No longer does her government look to the Gross Domestic Product (GDP) to measure success. Instead, they measure success by the happiness of their citizens. (1)
GDP Loses Out To Well-Being
The 4.8 million people living in New Zealand are the top priority of the government. “What Jacinda Ardern is doing is groundbreaking,” says anthropologist Jason Hickel, of the London School of Economics. “Ardern’s government is setting an example that the rest of the world can and should follow.” (1)
Five Well-Being Cornerstones Replace GDP
New Zealand’s Well-Being Budget is based on five cornerstones which include: (1)
- Your focused mental health support ($1.25 billion budget)
- Child poverty reduction ($656 million budget)
- Improving indigenous Maori and Pacific Islands people incomes and opportunities
- Transitioning to a low-emission and sustainable economy
- Supporting their nation in the digital age
As well, another $210 million helps combat domestic and sexual violence. (1)
A Great Place To Make A Life
When addressing parliament, Finance Minister Grant Robertson said, “Success is making New Zealand both a great place to make a living, and a great place to make a life.” (1)
“It is sobering that this is the first time we have had a national budget that explicitly focuses on well-being,” said Anna Matheson, senior lecturer in health policy, Victoria University of Wellington. “The challenges facing humanity globally – increasing inequality, rising populism and rapid environmental degradation, including the crisis with our climate – show governments worldwide are missing the crucial and pivotal role they play in stewardship, and in creating and maintaining collective well-being.” (1)
GDP Supporters Not Happy
However, not everyone is as ecstatic about the new plan. “I think this Well-Being Budget is nothing else than a public relations operation,” says Dennis Wesselbaum, director of foreign policy at Otago University. “This budget means the government does not care about economic growth and this is a worrying and dangerous development.” (1)
The leader of the center-right opposition National Party, Simon Bridges, calls the new budget “botched.” “Our economy is sharply declining and this Govt is asleep at the wheel. #Budget2019 has no plan to grow the economy,” he posts on Twitter. (1)
Well-Being Measures More Important
However, according to public policy researcher Jess Berentson-Shaw, this focus on public well-being is needed. “Beyond a certain point we find that growth erodes the quality of people’s lives because it starts to extract too much from the people and the environment,” she says. “People in the New Zealand government are making an attempt to measure what matters most to most citizens and are designing policies and funding them with that knowledge in mind.” (1)
GDP Provides Resource For Happiness
Others dispute this theory. “The main reason why most governments are so interested in GDP is because that’s where the resources available for improving people’s lives come from,” says professor Paul Hansen, head of the economic department at New Zealand’s University of Otago. (1)
Yet one need only look to the United States to see this isn’t quite true. According to the World Economic Forum, the wealth of the U.S. economy has led to a “weakening social fabric”. This is what Carol Graham, an economics professor and senior fellow at the Brookings Institution calls the “progress paradox.” (1)
No Additional GDP Needed
Meanwhile, Hickel reminds everyone throwing money at social challenges “blindly” isn’t the answer either. “We need to be smarter than that and it makes much more sense to target our social goals directly and that’s what Ardern is proposing to do,” he says. “In fact, rich countries like New Zealand can accomplish their social goals without any additional GDP at all.” (1)
As it stands, the New Zealand government is at an interesting turning point. Their new budget provides a potential model for other countries to follow should it prove to be successful. Now all we have to do is see how well it works.
