How much well-being was in that budget?

What does the ‘well-being budget’ mean for councils? Peter McKinlay goes looking for evidence of government’s transformational thinking. For, without that, he says well-being will simply remain a rhetorical overlay over traditional public-sector practice.

Government has delivered New Zealand’s, and possibly the world’s, first well-being budget. In his explanatory remarks in the budget, the Minister of Finance had this to say: “New Zealanders want us to measure our success in line with their values – the importance of fairness, the protection of the environment, the strength of our communities. That is what this Well-being Budget sets out to do.
“Many countries around the world have begun to look at different ways of measuring success to better reflect the wellbeing of their people. This Budget goes further and puts well-being at the heart of everything we do.”
Not all commentators were as bullish as the Minister. Much of the media response was somewhat sceptical. Many argued that the Minister had delivered a conventional budget prepared through a conventional process but with an overlay of rhetoric on the theme of well-being.
A lot of comment suggested the commentators themselves were relatively unaware of the extent to which well-being has become a major preoccupation internationally for economists, policy advisers and many governments.
In contrast, a number of public policy specialists outside central government welcomed the emphasis on well-being. But they pointed out that the Living Standards Framework measures aggregates, not the well-being of individuals or communities.

Does government see its well-being initiative as a continuation of
a top-down approach to governing? Or is it proposing a shift to more
of a partnership/co-governance approach working with local government
and the communities they both serve?

The reality is that aggregates – averages of well-being across a sizeable population – can present a very misleading impression. A well-known example is the difference between life expectancy at birth across an entire community, and life expectancy at birth for sub-communities which can be dramatically different.
So, what might a well-being policy involve? And what approach should the government take to ensure what it does has a positive impact on the well-being of New Zealanders? It needs to do this while recognising that our country is now a very diverse society and one which has been under significant stress, for example, as a consequence of rising inequality.
Specifically, does government see its well-being initiative as a continuation of a top-down approach to governing? Or is it proposing a shift to more of a partnership/co-governance approach working with local government and the communities they both serve?
Our starting point is that the delivery of a well-being budget is only one of a number of steps. Together, these steps need to ensure the activities of the public sector are aligned to ensuring the well-being of all New Zealanders is a primary objective of everything the public sector does.

Partners in well-being?

A moderate, but not overly close look, at the government’s development of its well-being policy suggests a two-pronged approach.
The first would involve central government, primarily through the work led by the Treasury on the Living Standards Framework as a means of developing aggregate indicators.
The second would involve local government through the restoration of the purpose to promote community well-being (emphasis added).
It’s a reasonable assumption that a government legislating for local government to promote community well-being would understand that much of what influences well-being at a community level results from the actions or inactions of government agencies.
The purpose of promoting well-being almost necessarily implies local government acting as an advocate and facilitator on behalf of its communities to ensure the local delivery of central government services best meets the needs and preferences of individual, and often distinctly different, communities.
Let’s track what happened. Restoring the purpose of promoting community well-being was a commitment the Labour Party had made prior to the election. Local government had asked for it primarily as a means of clarifying its authority to act.
As the Department of Internal Affairs (DIA) said in its regulatory impact assessment (RIA) “this… enables local authorities to shift their focus to ‘should we do this?’ from ‘are we allowed to do this?’”
From reading the RIA, it seems DIA may not have understood the exponential change in the nature of well-being practice and understanding since the purpose was last in the local government act.
In particular, it may not have understood the impact of restoring the rule that councils when taking decisions should take account of “the likely impact of any decision on each aspect of well-being”. The RIA included the comment “in practice, based on past experience we do not anticipate significant direct effects to result from the change”.
Work now going on through SOLGM and in most councils to develop community-specific indicators suggests local government has understood the difference.
There does seem to have been a major shift in thinking in DIA and by the Minister since the RIA was prepared.
In a November 2018 Cabinet paper, Local Governance for Community Well-being, Local Government Minister Nanaia Mahuta stated she wished “to consider how our two levels of government may work together to deliver intergenerational well-being”.

More recent events suggest central government may not be about to abandon the status quo approach of top-down governance.

She also said she wanted “to explore a paradigm of local governance that is empowered to develop localised initiatives to tackle areas of concern such as hazard and risk management, social enterprise, young people not participating in trade, work or education, barriers to employment, and homelessness and social housing”.
On paper, then, it looks as though central government could be signalling a genuine partnership with local government in dealing with well-being at the community level (where international practice suggests this is what needs to happen).
More recent events suggest central government may not be about to abandon the status quo approach of top-down governance from Wellington largely seeking to bypass local government.
On May 14, Minister of Finance Grant Robertson gave a pre-budget speech to the Wellington Chamber of Commerce outlining the approach intended by the well-being budget. A text search of the speech found no mention of the role of local government.
On the same date the Minister of Local Government put out a press release welcoming the enactment of the Local Government (Community Well-being) Amendment Bill.
She stated: “This legislation aligns with the Government’s wider well-being agenda and is a critical step in enabling councils and communities to make decisions about the services and facilities that will enhance their sense of place and the quality of their lives.
“We are determined to work alongside local government to empower communities and give them a stronger voice and role in lifting their own well-being.’’
The difference between the budget speech and the media release didn’t necessarily mean a difference of view. One test of this is what the budget itself provides.
A text search of the Summary of Initiatives in Budget 2019 found only one substantive reference to local government’s potential well-being role.
It came under the sub-heading, “Accelerating a Local Government Reform Programme to enhance community well-being and strengthen local governance”.
“This will be done by funding additional staff to work with local government to make improvements to water services, develop strategies to manage natural hazards and climate change and improve local government financial sustainability.”
The initiative will be led by the Minister of Local Government.
The budget provision seems unequivocal. In each of the next three years, $3.3 million per annum is to be provided so that the DIA can employ additional staff to engage in what looks like capability development for local government.

There is no suggestion of partnership between the two tiers of government, and no suggestion of working collaboratively with communities.
The significance of this decision goes beyond central government not using the well-being opportunity to create a partnership with local government. There is growing evidence a bottom-up approach to working collaboratively with communities is important for two very basic reasons.
The first is the need to rebuild resilient communities both as a counter to increasing alienation from the conventional political process and as a means of addressing increasing social dysfunction. Emerging challenges such as loneliness (now recognised as a more serious health threat than obesity) and an ageing population need community-based responses.
The second reason is the need to manage long-term fiscal risk. A number of prominent thinktanks are starting to argue societies like ours can no longer default to the taxpayer to manage every challenge we face. The days of “the government will fix it” are coming to an end simply because we cannot collectively afford the cost.
Instead, it is argued there is a need to build strong communities which, as is the case in Wiltshire, in the UK (see the article on page 23 of this issue Local by Default by my colleague Steve Milton) can develop and implement many of their own solutions for local problems.
Intelligent implementation of an holistic well-being policy provides the opportunity for dealing with both of these challenges.

Conclusion

The Government’s well-being budget represents a first practical expression of a commitment to changing the way the public sector designs targets and delivers the services for which it is responsible.
Simply changing the budget and departmental accountability must not be seen as the sole, or even primary, means of implementing a well-being approach.
Instead, government must recognise that necessarily implicit in a successful well-being strategy is a substantial shift from top-down to bottom-up governance.
This means communities playing a full role in expressing what constitutes well-being within their own circumstances, working collaboratively with their councils and with central government agencies developing and helping implement solutions which are ‘fit for purpose’ within their place.
This is the truly transformational opportunity. Without it, well-being will simply remain a rhetorical overlay over traditional public-sector practice.

• Peter McKinlay is executive director of McKinlay Douglas and director of the Local Government Think Tank.
  peter@mdl.co.nz

This article was first published in the July 2019 issue of NZ Local Government Magazine.