The stakes are high for Grant Robertson’s much heralded Wellbeing Budget in the year delivery. What are the expert verdicts?
Susan St John: Creditable, but not good enough
The government deserves credit for the reframing of the budget to reflect human wellbeing outcomes. This modernisation is well overdue. The new approach should mean there is a greater understanding of the tragic extent of the social deficits created over years of neglect.
Struggling families will certainly benefit from the extra spending on mental health, domestic violence, Oranga Tamaraki, removal of donations pressures and other important changes. But, looking specifically at child poverty, and benefits, there is very little to put the needed dollars into the hands of the families who are so clearly struggling now. The evidence from the social sector, foodbanks and budgeting services is that many families did not benefit nearly enough from the families package. These agencies report pressures that are getting worse not better. CPAG is particularly concerned with the worst-off 174,000 children below the very low 40% After-Housing-Cost line. They have not been given the income boost needed to reverse the damage of years of neglect.
The major announcements around wage indexation of benefits, raising the threshold before abatement and sanctions removal are costed at $541m over four years. This is a long way short of the $5.2bn that the Welfare Expert Advisory Group report claimed was necessary for transformational change. None of these three measures comes into play until 2020 and are at best a very partial response to WEAG recommendations. Core benefits must be boosted, the full Working for Families package must be given to all low income families, and the earning threshold lifted to at least $150 per week. Indexation is welcome but without the base increases it doesn’t mean much.
Susan St John is an honorary associate professor in the Economics Department, University of Auckland, and a founding member of the Child Poverty Action Group
Ben Thomas: Mighty Morphin Power Wellbeing
Poring over the government’s “Living Standards Framework” dashboard this week, to try and understand what a “Wellbeing Budget” was in advance of today’s big event, what was striking was how it could be anything.
According to the government’s chief bean-counters and cyber-security experts, the Treasury, we can measure our wellbeing through 12 indicators. But which should we focus on, and how to weigh them against each other? For example, it turns out that there is a high percentage of Kiwis who enjoy good housing, but also a high percentage who are doing badly, with relatively few in the middle. Conversely, fewer New Zealanders have high levels of “income and consumption” but fewer have low levels. Should we spend money on housing or economic development?
Only in “cultural identity” is the nation doing inarguably, unequivocally well: there is a large proportion of people with high levels of wellbeing and a very small proportion with low levels. Which doesn’t explain why the government has allocated another $130 million to the Screen Production Fund, for more episodes of Mighty Morphin Power Rangers featuring pavlovas and Kiwi flags, but I suppose you can’t argue with science.
Ben Thomas is a podcaster and high-level strategist for PR firm Exceltium
Graham Cameron: A par-for-the-course Labour budget
Our tūpuna knew that wellbeing is determined by the quality of our relationships: to all that is beyond us, to the land and sea, to our ancestors and to each other. So I was interested as to whether our first Wellbeing budget could be a platform for improving our human and environmental relationships.
Not so much. Perhaps the Living Standards Framework is to blame for the disappointing status quo. Treasury has decided wellbeing is a combination of Human, Social, Financial and Physical and Natural Capital. Capital, resource, investment. All the essential features of a cold, calculated relationship.
We got a par for the course Labour government budget. I’m glad there’s more social, health, education and housing spending. There needed to be. But we got no transformation. This is most apparent in climate change. Whilst our young people strike for the climate, Extinction Rebellion take direct action and iwi leaders combine to declare this an emergency, climate change was almost missing in the budget. New money for farmers with a hope they’ll find a solution so we don’t have to regulate them. A small amount of research money. Lots of rail (Who doesn’t like a train?). Papatūānuku would weep; no wellbeing for her.
Graham Cameron (Ngāti Ranginui) is a commentator on social and political issues concerning tangata whenua
Cath Conn: An encouraging step forward
Grant Robertson states that the Wellbeing Budget is a significant step forward – but is this the case? There are significant elements of the budget which will assist those in greatest need in what is currently an inequitable New Zealand society; noteworthy, are the indexation of family benefits; early child education support; mental health and addiction services; corrections services and child wellbeing services, mainly family and sexual violence. Research shows that the most effective way to reduce poverty is through boosting the income levels of poor families, and supporting their educational attainment from early through to vocational study, and the Wellbeing budget does seem to adopt that approach.
In the recent visit of the UN secretary general to the AUT South campus, he focused on the two global priorities of climate change/environmental protection and rapid technological change – the budget includes vocational training support, productivity measures, Māori and Pacific workforce considerations, support for Kiwi Rail, and other environmental investments – all positive developments in relation to the environment and technology.
Outstanding issues not addressed in the budget? There was no mention of reforming secondary school education to become fit-for-purpose in digital age NZ. Is the government awaiting the education review? There is a need to go further in developing a fair and equitable, as well as a sustainable, economy; with further measures to help low-income earners, and greater efforts to tax the wealthy.
Cath Conn is head of department, Public Health, at AUT
Catherine Leining: Integrating climate with economy needs to go beyond government
Under the wellbeing approach, new funding for climate change mitigation has been integrated with economic development. Adaptation gets only a brief nod.
One key theme is research for a low-emission future. Examples are a National New-Energy Development Centre in Taranaki, an Advanced Energy Technology Platform, a Bioresource Processing Alliance and Product Accelerator, and an Agricultural Climate Change Research Platform. MBIE will advance policy on the future of work and “just transition” issues.
In terms of tangible emission reductions, the focus is mostly on rail transport and sustainable land use. About $122 million will be directed to on-farm tools and advice for the low-emission transition. Funding freshwater work in conjunction with the Emissions Trading Scheme (ETS) may signal future pricing of at least some agriculture emissions. The Billion Trees Programme and regional forestry work through Te Uru Rākau also benefit.
Mainstreaming climate change into economic development makes good sense. To achieve steep 2050 emission targets, we need policy certainty to drive this change where it counts most: the private sector. This budget funds the new Climate Change Commission and an ETS auction platform. The next budget may see higher emission prices and ETS auction revenue on the horizon. Of course, that will depend on a strong Zero Carbon Amendment Bill. Public submissions are due by 16 July 2019.
Catherine Leining is policy fellow, Motu Economic and Public Policy Research
Eric Crampton: The missing link is Treasury itself
Delivering wellbeing begins with fixing Treasury. It’s really not that complicated. For the Wellbeing Approach to really work in the way that the government has been advertising, Treasury has to be up to the task of programme evaluation. It’s the missing link in the 2019 budget.
The government says that an evidence-base informed their spending priorities, but it is difficult to identify anything approaching cost-benefit assessment for the big spending items in this year’s budget. That makes the impact analysis and policy evaluation promised in the Wellbeing Budget Process even more important. We have to be able to tell which programmes led to which changes in outcomes, for better or worse, if we would like Budget 2020 to be able to allocate funding away from things that don’t work for the benefit of things that do.
But over the past several years under Secretary Gabriel Makhlouf, Treasury’s capabilities in core economic analysis have eroded, with senior and experienced economists replaced by junior staff with little – if any – training in economics. Despite the past week, IT is the least of Treasury’s problems. Rebuilding core capabilities under new leadership is vitally important. We hope the next Treasury secretary is up to the very challenging task to come.
Eric Crampton is chief economist at the New Zealand Initiative in Wellington
Hirini Kaa: A step towards the Decolonising Budget
Give a people some fish and they can eat for a day. Take away that people’s ability to fish and they’re gonna become dependent on your fish. Give them dodgy, left-over fish sporadically and watch their health go down and disregard of fishing rules go up. Give them a boost in their fish handout and call it Wellbeing …
Anyway, you get it. Great news in this budget on vulnerable children, on beneficiaries, on mental health, on reducing sexual violence. Te Ara Oranga, for example, will enable a better approach to methamphetamine addiction and treatment in the North, moving from a focus on moral detriment and punishment to health and community restoration. All of this is well overdue and will bring relief to the immense pain in some of the darkest, most abandoned corners of this land. Those who work to sustain our communities will have their load lightened. It will also help address the symptoms of long-term poverty for Māori.
But the fishing metaphor stands. Eighty million extra for Whānau Ora is one of the few glimpses of a different future, shifting to enabling and empowering whānau. Let’s acknowledge this Wellbeing Budget as an important part of the journey on the way to the real goal: the Decolonising Budget.
Rev Hirini Kaa is a lecturer in history at the University of Auckland
Siddhartha Mehta: The right direction, but too slow on climate
Last year, after decades of ignoring the elephant in the room, climate change made its first appearance in our national budget. This year’s Wellbeing Budget offers something more. The government has shown a willingness to adopt a more holistic view of economic management that restores the value of people and the environment.
We welcome the $107m set aside for climate action, including $42.7m to ensure the Climate Change Commission can provide expert advice and emissions monitoring to keep us on track. We welcome the focus on public and active transport, especially the plans to reduce fares for those in lower income households. The $1bn funding boost for Kiwirail is the greatest success for the climate in this budget. It recognises the need to get Kiwis out of cars and into public transport, which makes our cities more liveable too.
Yet we’re just playing around the edges at the moment. The 2019 Budget aims to recognise well-being across generations, but we must face the climate crisis head on to ensure that future generations do not suffer the consequences. We urgently need transformational change underpinned by the values of ensuring a fair, just and sustainable Aotearoa for all.
Siddhartha Mehta is a spokesperson for Generation Zero
Liam Hehir: Not such a big event
For superfans of the governing troika, Simon Bridges’ spoilers may have reduced their enjoyment of budget day. That will be a minority reaction, however. For those not directly affected by new spending (which is to say, the overwhelming majority of New Zealanders) the whole thing is an incomprehensible abstraction.
In the absence of an immediate, concrete and personal effect, that’s what government budgets really are. As George Orwell observed, streams of government statistics tend to bruise your ears after a while. So, for those without a rooting interest, the budget is not really the big event it may once have been.
If you want to put that assertion to the test, look for a few garden variety Labour, Green or NZ First voters. These are the people who supply these parties with most of their votes but who also don’t waste their day looking for things to be angry or sarcastic about on the internet. Try asking them to explain what the Wellbeing budget means and whether they’re excited about it.
None of this is to say that the government’s ideas are devoid of merit. But will they win any votes for the coalition? It seems doubtful. Although, in fairness, they won’t lose many either.
Liam Hehir is a political commentator
Nicola Gaston: connecting the dots between science and the environment
The word ‘budget’ always makes me think of budgies. So one of the interesting things I have learnt from looking at today’s Wellbeing Budget, is that the word budgie derives from an Indigenous Australian word, Betcherrygah, meaning ‘good parakeet’. Nothing to do with a budget, which originally referred to the limited capacity of a small leather bag…
But there is something that makes me think that a ‘good parakeet’ is not a bad metaphor for this Wellbeing Budget. All governments need to be judged on implementation, not promises, but there is something about the squawking that happens on budget day that matters. The government needs to put its money where its mouth is, and there is perhaps no better example than the recently announced Zero Carbon Act: targets are great, but incentives and investment are what will get us there.
One of the things I learnt at the Just Transition Summit in Taranaki a few weeks ago, was the extent to which the necessary investments intersect with a wide range of societal needs: from venture capital to support start-ups to expand, to targeted workforce development, including action to counteract growing inequality. This budget does not do everything, but what it does do is connect the necessary dots: from consistent support for science and innovation, to conversations about climate change centred on justice and wellbeing.
Yes, we should incentivise innovation BOTH for its economic impact and ability to support exciting careers in New Zealand, AND for its ability to create step change in how we deal with limited natural resources, sustainability, and some of the other big challenges facing us in the 21st century.
Nicola Gaston is an associate professor in the department of physics at the University of Auckland and co-director of The MacDiarmid Institute for Advanced Materials and Nanotechnology.
Kirk Hope: Helping Kiwi businesses fly
Behind the glitz, glam and melodrama of this year’s budget rollout are some promising injections for Kiwi business. The government has earmarked positive contributions to venture capital, innovation, infrastructure and climate change. A new $300 million fund will help fill the ‘capital gap’ for New Zealand firms that expand beyond the early start-up phase. That’s great news for mid-sized start-ups has paved the way for New Zealand’s next tech ‘unicorn’. The contribution will aid promising Kiwi firms demonstrate their skills, compete and win on the global stage.
Another $157m to assist firms in developing high-value low-emissions products recognises the deep need for research to come up with business solutions to climate change. New Zealand was the world-leader in initiating the Global Research Alliance on Agricultural Greenhouse Gases and it is pleasing to see this supported with an $8.5m provision in the budget, along with $25m for the Agricultural Climate Change Research Platform. The budget also provides $3.5m to better equip young people for life after school. All secondary schools’ students will have access to programmes that will provide civics knowledge and skills, financial literacy, and key workplace competencies.
Business wants to ensure that the current reform of vocational education will increase the number of people in on-job and other vocational training. The allocation of $197m is a positive sign in support of that goal, and the allocation of unused Fees Free funding towards this is appropriate.
Kirk Hope is the chief executive of Business NZ
Russel Norman: This is not a climate emergency budget
I am pleased that the Budget is looking beyond GDP as a measure of well-being. But fundamentally I judge the Budget on what it does to turn around the triple crises of climate, biodiversity, and inequality.
Climate: The biggest climate spend in this budget is the $1bn per year to subsidise agricultural greenhouse emissions under the Emission Trading Scheme. We are paying taxes to accelerate our own demise. Beyond this, the Budget fails on energy transition. We need a massive rollout of solar and batteries to provide the renewable energy to electrify transport and industry. But there is nothing in the Budget about this. The investment in rail is one bright spot.
Biodiversity: There is a small increase in DoC funding and funding for ‘sustainable land use” may be positive depending on what it is used for. But where is the money for cameras on fishing boats, given that we know that industrial fishing is causing enormous harm.
Inequality: There is a bit of tinkering but where is the Wealth Tax? How can we we turn around NZ’s obscene inequality if we don’t tax wealth? What about an annual 2% tax on all wealth above, say $10m, and use the proceeds to cut poverty and build state houses? Using a wealth tax to fund state housing, now that would be transformative.
Russel Norman is executive director, Greenpeace NZ
Sam Oldham: Not good enough for teachers
In education, the so-called Wellbeing budget falls well short of its name. Things like paying school fees for parents will go a long way for some, but it is evident of a broader piecemeal approach to the crisis in education.
The crisis in teacher staffing and workload is at risk of being all but ignored. Spending on new models of teacher training and recruitment ignores the fact that the teacher shortage is primarily a problem of retention, not recruitment. Without decent pay and conditions, teachers will continue to leave teaching or leave the country, regardless of how they entered the profession, at enormous detriment to a fair and equitable education system.
The turn to employment-based teacher education raises serious questions. What systems will ensure these trainees are properly equipped to teach our ākonga? What deeper knowledge and skills will these trainees miss out on by going straight into classrooms?
Continued spending on Teach First NZ is a real shame. This organisation, part of a global education “movement” sponsored by corporate philanthropy, puts trainee teachers exclusively into low-decile schools, where they learn their new craft practising on predominantly low-income young people, large numbers of whom are Māori and Pasifika. International research shows clearly that these schemes have low retention rates. Scotland recently banned Teach First for that reason.
Above all, the government’s unwillingness to fix the crisis in our education system is reflected in its meagre pay offer to desperate teachers. It is reflected in the words chanted by thousands of those teachers at the steps of Parliament on Wednesday: not good enough.
Sam Oldham is a secondary teacher and a PhD student in education policy
Alison Pavlovich: We deserve better on tax
Budget 2019 is the first real test to see how the newly developed wellbeing framework will impact government policy and decision making. To be successful, we need to see a focus upon improvement in the distribution of current wellbeing, and the four capitals: social; natural; human and physical/financial capital. There are no new announcements in the budget regarding changes to the tax system to achieve improvement in these areas.
The Tax Working Group considered the integrity of the tax system in light of the intergenerational wellbeing objective. They concluded that a capital gains tax and environmental taxes are essential to meet this goal. Failure to introduce the changes recommended by this group mean our tax system is not optimal. Untaxed wealth continues to accumulate in the form of capital gains. Environmental costs are not borne by those who exploit our natural capital for commercial gain.
The budget also makes a passing reference to a continued commitment to ensuring “tax policy development continues to be inclusive, consultative and transparent”. A very constitutionally challenging change to tax policy is taking place right now with little to no consultation or public discussion. A current bill proposes to extend the commissioner of Inland Revenue’s powers so she can exempt a taxpayer or group of taxpayers from a law. This was introduced by the current minister of revenue in a SOP, ie a last minute addition to the bill. Chances are you haven’t heard about it. Given the lack of inclusiveness, consultation and transparency on this matter, perhaps we can look forward to an improvement to this in the future.
Alison Pavlovich is assistant Lecturer in taxation, Massey University
Murdoch Stephens: A disappointment on refugees
I know that I am supposed to be grateful for today’s budget. Six years ago I started the double the quota campaign, culminating last September with the government announcement of an increase in our refugee quota to 1500 a year from 2020. The implementation of that policy has total costs of $140m over five years. That’s a lot of money but economists say costs are recouped in the mid-term and refugees are a net economic benefit in the long term.
I was hoping to see a boost to the Strengthening Refugee Voices programme. When Ardern wanted to be hosted the day after the mosque attacks in Christchurch she relied on the desperately underfunded Canterbury Refugee Centre. I wanted to see support for these front-line groups. All I have seen are one-off grants and diminishing signs of solidarity.
There is $23m allocated for “Maritime Mass Arrival Prevention”: in short, doing all they can to stop asylum seekers getting here by boat. Stopping sea drownings is admirable, but that isn’t all these funds will do. The funds are likely to harass genuine visa holders who Immigration officials worry will claim asylum, driving down protection for those most in need. We need to make sure this allocation doesn’t turn into more funding for the harassment of genuine visa holders and asylum seekers.
Murdoch Stephens is the founder of the Doing Our Bit campaign
Andrea Byrom: A focus on managing biosecurity
Conservation received a big top-up in last year’s budget, so while it’s pleasing to see that support flow through from last year’s allocations it does not surprise me that the focus is on biosecurity this year, with a strong emphasis on managing biosecurity risks via trade, travel and import pathways.
The management and containment of biosecurity risk organisms is an ongoing issue for New Zealand and it’s great to see this beefed up too. Although this allocation is operational rather than science, increasingly I think there is a lot the science sector can do to work closely with government and industry to help strengthen the biosecurity system.
Likewise it’s heartening to see further investment in freshwater, particularly around water allocations, wetland restoration and mitigating weeds and pests in lakes. In terms of science and innovation, the top-up for kauri dieback research will provide a much-needed boost to the 2018 investment to save one of Aotearoa’s most iconic trees. This should enable scientists to accelerate strategic research into new tools to combat this pathogen.
Dr Andrea Byrom is the director of NZ’s Biological Heritage National Science Challenge (via Science Media Centre)
Ross Bell: Big investments in drug issues
Where do we start? There is a lot of great stuff in the 2019 budget that will help New Zealand come to grips with the issues drugs are causing. The $1.9 billion allocated for mental health and addictions is a big deal. We needed some fresh thinking and a way to get people help, early.
The most significant announcement tackles this head-on: a new, universal frontline service will be set up. Over 300,000 Kiwis should be able to access free mental health and addictions help from their doctor’s clinic, iwi health provider or other services in a few years time. The thinking behind this is bold – so is the $455 million allocated. Going head-on to challenge the root causes of addiction by bolstering Housing First is a welcome move.
Extending Te Ara Oranga programme that puts the response to methamphetamine on a health footing in Northland is an investment in innovation that will continue to pay off in many ways. And it’s reassuring that existing services will be better supported, and there’ll be more specialist services in schools and prisons.
While, $13.7 allocated to the cannabis referendum is less than the $25 million for the flag referendum, we hope it will be enough. There is more than this which we are still getting our heads around. Anyone struggling with a drugs issue and their whānau, friends and communities, and those working in the AOD sector can be extremely positive about this bold budget.
Morgan Godfery: My three takes
surprised i haven’t had any media calls today when i have three outstanding takes on standby:
– this is just another status quo, neoliberal budget
– this is the best budget since the days of pete fraser
– my wife does the budget
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