Date posted: 09/08/2019 5 min read

How does NZ’s Wellbeing Budget measure up?

When it comes to measuring returns on investment, NZ’s 2019 Budget does well on some items but is absent on others.

In Brief

  • While there are clear targets to measure the effectiveness of child wellbeing and housing programs in the NZ Budget, targets for other large programs are absent.
  • The government has refused to set a target for suicide reduction, saying it might infer there’s an ‘acceptable’ level of suicide.
  • CA ANZ believes a robust measurement of outcomes would flag what policies are the most effective.

Most of the media and public discussion about New Zealand’s 2019 Wellbeing Budget, delivered on 30 May, focused on how the Treasury was ‘hacked’ before the Budget was released. The Treasury’s data security is important, but all the hacking talk was a distraction from a more important debate about the policy initiatives in the Wellbeing Budget.

CA ANZ’s pre-Budget public poll confirmed that most Kiwis support the government’s five Budget priorities: mental health, child wellbeing, Māori and Pasifika outcomes, productivity, and transitioning New Zealand to a low carbon economy.

Budget 2019’s big ticket expenditure items include NZ$1.5 billion on social supports including frontline mental health services (NZ$823 million), housing the homeless (NZ$346 million), and preventing family and sexual violence (NZ$320 million).

Given the size of the investment, the government needs to set specific targets and establish ways of measuring the success of the funded programs.

Solid start on child wellbeing and housing

A robust approach has been adopted for child wellbeing. Last year’s Budget allocated NZ$25million to improve the measurement of child poverty, and Budget 2019 included a specific Child Poverty Report.

The Child Poverty Reduction Act 2018 includes three- and 10-year targets for reducing child poverty on three primary measures (children in low income households before and after housing costs, and children suffering material hardship). The targets are specific, measurable and not overly complex.

The statutory obligation to report on progress against the targets – in an amendment to the Public Finance Act – indicates the seriousness with which this government takes the issue.
Budget 2019 includes an investment of NZ$197 million in Housing First. The program is designed to help 2700 homeless people into permanent homes. This is a significant investment in each of those people but, importantly, the target is clear, and the success of the program will be measurable.

Targets for some of the other large programs are absent or less evident, or appear less robust. This is disappointing given that in many cases the outcomes should be relatively easy to measure.

Does the government need a suicide reduction target?

Grant Robertson, New Zealand finance minister.Grant Robertson, New Zealand finance minister.

The focus on frontline mental health services includes NZ$40 million on suicide prevention and NZ$44 million on improving drug addiction services. This is one area of expenditure against which more measurable targets would be beneficial.

The government has refused to set itself a target for suicide reduction because, it says, any suicide is a tragedy for the victim and their whānau, and because it is wrong to send a message that there is an acceptable level of suicide.

Yet while every suicide is tragic, that should not mean it’s wrong to look at statistics to confirm if suicide prevention programs are effective.

Targets are a blunt tool but they shine a light on what measures are working or not and can generate discussion about whether more investment or an alternative policy is required. As economist Arthur Grimes commented on Budget 2019: “It is not enough to state what will be spent; one must also state what benefits one expects to reap as a result of making these expenditures. A government that is serious about improving wellbeing would wish to be accountable in this way. Instead, we see the typical approach of officials and ministers to trumpet expenditures while ensuring there are few markers to enable verdicts to be made in the future on the success or otherwise of the programs put in place.

“Targets are a blunt tool but they shine a light on what measures are working or not.”

Given the wellbeing expenditure is intended to have an inter-generational effect, the targets and measurements of success need to be long term. Providing permanent homes for the homeless; residential care and detoxification services for addicts; mental health and addiction services for prisoners; and nursing services in more schools should all improve the lives of vulnerable Kiwis.

The more robustly we can measure the success of the programs, the more likely it is that the government will achieve lasting inter-generational outcomes.

Read more:

NZ Wellbeing Budget an ‘evolution’, not a revolution

NZ’s 2019 Wellbeing Budget has been welcomed, but chartered accountants want hard metrics for evidence-based decision-making.

Read CA reactions to NZ Budget 2019

Business not totally left out of the Wellbeing Budget

Commentary, insights and analysis of the New Zealand Budget 2019.

Read more analysis of the NZ budget 2019