Labour’s Wellbeing Budgets have turned out to be a failed, hyped-up experiment, pursued at the expense of abandoning real economic growth, argues Dr Dennis Wesselbaum.
In January 2019 at the World Economic Forum in Davos, Prime Minister Jacinda Ardern announced the world’s first “Wellbeing Budget”, promising “doing things differently”, and to “look beyond economic growth”.
The Budget received worldwide praise: The New York Times called it the “Next Liberal Milestone”, Forbes praised New Zealand for “pioneering a community-centered economic plan”, and the UK and other countries started investigating to shift their focus to wellbeing.
The budget promised to address issues such as climate change and environmental impacts, social inequalities, mental health, housing, and to measure success differently than by GDP.
We have since had three “Wellbeing Budgets” under two Ardern-led governments since 2017. Now that the Government had time to implement its policies, it is time to look at the impact these budgets have had.
New Zealand has the highest suicide rate in the world among 15 to 19-year-olds and a record number of young people report eating disorders. The number of people seeking mental health and addiction services is steadily growing. Alcohol consumption is increasing, and New Zealand has the highest rate of domestic violence in the world.
While spending on education is increasing, the performance of children is steadily decreasing. Labour productivity is amongst the lowest in the developed world. According to the Climate Action Tracker, New Zealand “lacks strong policies, despite its Zero Carbon Act” and the Act “does not introduce any policies to actually cut emissions”.
You are also more likely to be able to afford a (median) house in Los Angeles, San Francisco, or London compared to Auckland.
In fact, New Zealand has seen the largest increase in house prices in the world over the past two decades. In 2017, the government promised to build 1,000 homes for first-home buyers by 2019 and 100,000 within ten years but managed to build only about 600 by 2021.
So far, the Wellbeing Budgets have promised many things but I fail to see what they achieved. The Government’s obsession with “wellbeing” comes at the cost of abandoning economic growth and a relatively poor economic performance.
This insight is starting to spread around the country. Labour has lost up to 10 percentage points in some polls since the last election and farmers were the first to protest on a large scale.
Looking back, the Wellbeing Budgets have never been anything other than a successful public relations exercise.
Sadly, they all fall short of effectively supporting important areas like education (from kindergarten to universities), health, research, housing, and infrastructure and they abandon fostering economic growth.
There is nothing left from the initial worldwide hype around the Wellbeing Budgets. The Ardern-led governments have wasted the chances they had to make New Zealand stronger in the future and missed their election and budget targets.
It would be much better if the Government would stop looking beyond GDP and instead look at developing a proper economic growth strategy. After all, jobs earning decent wages are the foundation of wellbeing.