The announcement by the Minister of Finance that the budget he presents next year will be what he described as a “well-being” budget may have been dismissed by Simon Bridges as of no interest and little consequence but it represents, on the contrary, an important break with what has gone before.

Political announcements about budgets may lead to eyes glazing over for most people, but this one is different. We have had years, not to say decades, of budgets that have focused on the state of the government’s books rather than the health of the wider economy in which we all live and whether that economy is delivering what it should for the people as a whole.

It was always a curious misapprehension that the main responsibility of a Minister of Finance was to balance the government’s books. The government’s finances are only one part – an important one admittedly – of the total economy; it is perfectly possible (and indeed has been, over a long period, par for the course) to see a preoccupation with the government’s bit of the economy being accompanied by a disappointing performance by all the other bits, the totality of which matters greatly.

There is little comfort to be gained from a government surplus (so loudly trumpeted over recent years) if at the same time the country is failing to pay its way (as evidenced by a perennial trade deficit). And the point becomes even more telling if the indications about future performance, such as a sluggish growth in productivity, suggest that there is little chance of the real economy shifting up a gear.

It is therefore a welcome and refreshing change to see a Minister of Finance taking account of how the economy is performing in a wider sense and being willing to look beyond the accountant’s obsession with the financial out-turn in just one part of the economy.

What, under the new approach now announced, is meant by a “well-being” economy? The first point to register is that it does not imply, as some critics are bound to proclaim, that the government is about to let go control of the government’s finances. On the contrary, the latest Treasury report shows the government’s finances in very good shape, with a healthy surplus.

What Grant Robertson is saying, however, is that there are other measures of economic performance that should also come into the reckoning. In his willingness to take this wider view, he is, incidentally, reflecting an increasing international interest in measurements other than Gross Domestic Product to tell us about how well we are doing. Many countries are beginning to look at various forms of what might be called “happiness” indices as an alternative to GDP and as a guide to what economic success really means.

But Grant Robertson has gone further, and has spelt out what he thinks are the important elements of “well-being” that should be taken into account in framing his next budget – and he focuses particularly on those elements that he believes have received inadequate attention in the past.

He cites, for example, the mental health of our people, particularly young people, and he looks specifically at how we are responding to the environmental challenges we face. He also points, more orthodoxly, to the standards of service delivered by public services such as education, health care and public housing, and indicates correctly that child poverty is a major negative when assessing the economy’s performance.

A “well-being” budget will, he says, focus on outcomes, and not just on inputs and outputs. It will take a “whole of government” approach to issues such as the skill training of our workforce, the regional disparities we suffer, and the particular needs of Maori and Pasifika – all of which have been neglected to the general detriment for far too long.

A “well-being” approach promises a welcome change in the way we identify and focus on our economic goals; that change may be the key to doing better than we have so far managed. More power to Grant Roberson’s elbow – his commitment to well-being may well prove to be a welcome New Year present for us all.

Bryan Gould

24 December 2018

Around the turn of the century, I had the privilege and pleasure of serving on the board of Television New Zealand for a period of about ten years. I enjoyed the experience enormously and welcomed the chance to make my small contribution to the state of television in this country.

Television was not exactly an unknown world to me. As an MP in Britain, I had been interviewed often for British news and current affairs programmes. And I had, while out of the House of Commons for a period, had some experience on the other side of the camera, when I was employed for a few years as a presenter and reporter on a top-rated and nationally networked weekly current affairs programme.

During the time that I was on the board, TVNZ was faced with growing commercial competition from Sky Television and with the emerging threat, and competition for advertising dollars, from the internet. It was able, however, to gain some competitive advantage through its role as the national broadcaster – and it operated in terms of a Charter which spelt out its particular responsibilities and opportunities in this capacity.

The Charter required TVNZ to go beyond the purely commercial; it was still required to produce an annual dividend for its government shareholder, but it was expected to act more like a mini-BBC than would have been the case for a purely commercial operation. Our excellent Chief Executive at that time, Rick Ellis, would proclaim from time to time that the Charter was “in our DNA”.

All that changed, however, with the election of a new National government in 2008. The Charter was scrapped and TVNZ was required then to maximise profits like any other commercial enterprise, which meant that they could show only those programmes that would attract the advertising dollar. The concept of “public” television was lost.

This is not to say that TV does not today do a very creditable job with its news, political and current affairs programmes. But those programmes do not cover the full ambit of what would normally be regarded as “public” television.

Public television would normally be expected to deliver a thoughtful treatment of issues of wide public concern – issues like climate change, the quality of our water, New Zealand’s place in the world, social issues like poverty, homelessness and inequality, hot topics in economic and trade policy, health issues such as mental health and suicide, our constitutional arrangements, and so on.

Despite the efforts of socially aware programme-makers such as Bryan Bruce, issues such as these scarcely receive the attention they need and deserve; the national debate is the poorer for their neglect.

The good news, however, is that “public” television is back on the agenda, courtesy of none other than Bryan Bruce himself. Bryan has established a new website, called New Zealand Public Television. The new site, which anyone can access for nothing at www.nzptv.org.nz, has a dual purpose.

First, it identifies programmes, from both New Zealand and around the world, that explore issues of interest to New Zealanders, whether living here or overseas, and makes them available to a Kiwi viewership. The site, although primarily provided for a domestic audience, will undoubtedly be of great value to ex-pat Kiwis and to those on holiday or living overseas who may miss programmes about issues that are making waves at home.

Secondly, it offers a platform to programme producers with excellent ideas for compelling programmes that would not ordinarily appeal as commercially viable to television companies. Because the new site is now visited by sufficient numbers, it is funded by New Zealand on Air, and New Zealand Public Television can therefore find funding that will allow a good programme idea on a serious topic to get off the ground; programmes will be made that would not otherwise have been made.

Those interested – as both programme makers and viewers – in television programmes that go beyond the normal commercial diet (which I won’t attempt – as a concession to popular taste – to define further) now have somewhere to go. New Zealand Public Television promises to lift the level of debate on those topics that matter so greatly to so many of us.

Bryan Gould
9 December 2018

Fads and fashions in economic policy come and go; they invariably reflect the self-interest of those who propound them, and since the “haves” tend to have louder voices and more influence than the “have nots”, it is often the interests of the former that prevail when economic policy is formulated.

A couple of relatively recent examples will show what I mean. When the Global Financial Crisis struck, the response decided upon in many countries (and the UK in particular) was to tighten belts and slam on the brakes – such policies became known as “austerity”. The theory was, presumably, that governments had to steady the ship, and that they could not afford to go on spending when there was so much uncertainty.

But austerity, as a response to what threatened to be the worst recession for decades, was the very worst step that could have been taken. The great economist, John Maynard Keynes, had shown in the Great Depression that the only cure was to spend more, not less – that a depression or recession occurred because there was not enough demand (or, in other words, spending power) and that the proper remedy was to inject more money into an economy that was about to close up shop altogether.

The lessons learnt in the 1930s counted for little, however, when faced with the prejudices of those who decide these matters. For the holders of assets, there were two drivers – they wanted the value of those assets maintained, and they wanted to be sure that if anyone had to pay a price to put things right, it would not be them.

As a result, governments found large sums of money (usually by printing it – the polite term was “qualitative easing”) but they used that money not to boost economic activity, but to shore up the banks, with the result that the value of financial assets was boosted. At the same time, they cut spending; the spending cuts bore heavily on the poor, weakening the public services on which they depended, such as health and education and housing, and holding wages and benefits down.

It is only now, after nearly a decade or more of such policies, that a consensus has begun to emerge, supported by agencies like the Word Bank and the IMF, that austerity was a mistake, and had done much unnecessary economic and social damage.

Another example was the fashionable theory that, as the rich grew richer, their good fortune would “trickle down” to make everyone better off. The theory was used to justify tax cuts for the rich and other policy initiatives designed to boost profits, and to allay concerns about the growing gap, in both wealth and income terms, between rich and poor.

Sadly, the theory was revealed to be no more than wishful thinking. The growing riches of the haves did not “trickle down” but were hoarded or used to buy income-producing capital assets (which had the effect of widening the income gap still further) or spent on various forms of conspicuous consumption.

The other side of the same coin has been the refusal to recognise that the economy is likely to benefit much more from an increase in the purchasing power of the poor than of the rich. Every extra dollar for the low-paid (as for the recent increase in the wages of hospital cleaners) will be spent and will lift the volume of sales, thereby benefiting profits.

The conventional wisdom, however, not only ignores the social benefits of lifting people out of poverty, but also chooses to see higher wages as simply an increased cost and therefore to be resisted. We need look no further for an explanation of the paradox that business confidence remains low although the economy is doing well.

There must be a suspicion that, sadly, for some people it is staying ahead that matters – maintaining their advantage over others is more important than simply doing well themselves.

It is time we – the voters – recognised that self-serving fads and fashions – not to say prejudices -are not a workable basis for a sensible economic policy. Doing what is right in social terms will often be the best economic policy as well.

Bryan Gould
27 November 2018