New Zealand is the first county to deliver a ‘Wellbeing Budget’ which goes beyond GDP as the primary measure of success to also include how we do socially, culturally and environmentally.
Introduced by Simon Kuznets to the US Congress in 1934, Gross Domestic Product (GDP) quickly made its way around the world becoming the standard for measuring a country’s success. GDP is a monetary measure of all the final goods and services produced in a period of time.
“While [GDP growth] is a good measure of activity in the economy, it doesn’t tell us enough, or indeed very much at all, about the quality of the activity in our economy.” New Zealand Finance Minister, Grant Robertson.
GDP also fails to measure welfare indicators such as happiness, equality, and quality of life. Despite the limitations of GDP and the forewarning given by Kuznets against its use as a measure of welfare, GDP has remained the global standard for almost a century.
New Zealand is the first county to deliver a ‘Wellbeing Budget’ which measures its success by the wellbeing of its people, not just its income. “Under our wellbeing approach, the development of Budget priorities represents a new way of working and of thinking about how we develop priorities and measure our success as a country,” Grant Robertson said.
“Using the Treasury’s Living Standards Framework (LSF), evidence from sector-based experts and the Government’s Science Advisors, and with collaboration among public sector agencies and Ministers, we have identified five priorities for the Wellbeing Budget,” Grant Robertson said.
Measuring natural, social, human, financial and physical capital over time collectively it’ll give a better picture of the health of the nation. It’s smart thinking.
LEADING THE WORLD
The OECD has been urging countries to take a different view of success. And New Zealand has got in first. Now economies around the world will be keeping a close eye on New Zealand as the Wellbeing Budget comes into action in 2019.
Particularly by other countries which are exploring wellbeing measures such as the UK, Austria, Scotland and South Korea.
Looking for a place that thinks more holistically about success?
We know a place.