NZ Treasury site, broader commentary. There’s a good explanation here. As noted there are two key tests – 1) whether the 2019 Well-being Budgetprovides meaningful boost to the five priority areas, ie does it shift the cash, and 2) at what expense to what other policy areas.
The New Zealand Treasury is using an approach to well being and budgeting. This is based on a notion that whilst there is universal access to health care, there should also be universal access to social conditions that lead to health. Investments will require a cost-benefit analysis AND a wellbeing impact summary, we will consider the feasibility of this.
Government will measure benefits through four lenses – human capital, social capital, natural capital, and financial and physical capital – our built and financial assets. It is an attempt at all of government approach to well being focusing on “outcomes” rather than input and output.
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1) the NZ approach
the NZ Treasury is opening a discussion on NZ approach to well being and budgeting. There is an excellent (long) summary of the issues around definition and measurement. Interesting in that looking at inter generational issues as well as current stock.. The broad approach is set out here
New Zealand are taking a deeper approach and using well being to inform Treasury decisions, where a 30 year time horizon is taken and treasury commitments reflect well being ambitions. An approach is taken that whilst there is universal access to health care, there should also be universal access to social conditions that lead to health. New Zealand approach described here. In summary investments will require a cost-benefit analysis AND a wellbeing impact summary. The approach is based on the premise that economic growth is an important contributor to wellbeing but it is not an end itself. Government will measure things through four lenses 1) human capital – our people and skills, 2) social capital – our connections, 3) natural capital – our environment and 4) financial and physical capital – our built and financial assets. It is an attempt at all of government approach to well being focusing on “outcomes” rather than input and output. There are a number of specific priorities against which investments will be measured 1) creating opportunities for businesses, regions, iwi and others to transition to a low emissions economy, 2) innovation, social and economic opportunities in the ‘digital age’, 3) lifting Māori and pacific incomes, skills and opportunities, 4) reducing child poverty, improving child wellbeing and family violence, 5) supporting mental health with a specific focus on under 24-year-olds.
The work will cover the following issues:
- •Data availability – Whether the data for indicators are available, or need to be collected more often or new collections are needed. If the latter, how long it would take to change current practice.
- •Distribution of wellbeing – How far social and demographic inequalities can be monitored.
- •Frequency of reporting – There are practical limits to how often it is useful to report and what is reported. For instance, gross domestic product (GDP) is measured quarterly, inequality indicators are based on annual data and anything requiring census data is collected every five years. These data limits have an impact on the frequency of useful reporting.
- •Comparability – Which indicators mean this approach provides a consistent international and inter-temporal time series to support analysis and provide historical benchmarks.
- •Indicator sensitivity – An unanswered question is how well society-wide indicators will pick up the impact of policy initiatives, either because they have an impact on a relatively small group of people (eg, children in care) or because the impact will be gradual and any increment spread over a number of individual data points. This is particularly relevant where there is potential for policy targets.
- •Type of measurement – While GDP is measured cardinally, using a fiscal weighting to address aggregation issues, it is unclear if this will be possible or desirable using a multi-dimensional measure of wellbeing or the capitals. The issue of how the indicators are measured will need to be addressed, including alternative approaches that are good enough for the purpose. This includes considering ordinal changes, rather than the level, assessing if the indicator shows greater/smaller, more/less and so on; or purely qualitative measures. This potentially deals with some data availability issues.
- •Compatibility with current indicators – The practical implications of the different measures include how well they map with indicators currently used by government agencies.
- •Link between current wellbeing and the capitals – The dashboard of indicators will be more useful the more we understand the links between current and future wellbeing. Further work is needed to deepen our understanding of these links.
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2)Proposed Treasury Wellbeing Framework
Capital based approach https://treasury.govt.nz/publications/dp/wellbeing-frameworks-treasury-dp-18-01
• financial and physical capital – such as homes, roads, hospitals and financial assets
• human capital – such as health, knowledge and skills
• social capital – as will be discussed in this paper, and
• natural capital – which covers things such as a climate favourable to life, quality of water and air, and biodiversity.
Treasury intends to further incorporate the four capitals within policy development and public accounting by assessing for each of the four capitals:
1. What are the current stocks?
2. What are the trends in how stocks are changing over time?
3. What are the risks and opportunities relevant to each capital stock?
The underlying principle of the capitals framework is that good public policy enhances the capacity of natural, social, human and financial and physical capital to improve wellbeing for New Zealanders (see Figure 2). In the Treasury’s view (The Treasury, 2017) this means that, in good policy, the capital stocks:
• are sustained or enhanced, not eroded by current generations at the expense of future generations (sustainability)
• are shared equitably in a way that sustains or enhances the capitals (equity)
• allow for a cohesive society, where people and groups respect others’ rights to live the kinds of lives they value (social cohesion)
• are resilient to major systemic risks (risk management), and
• generate material wellbeing (economic growth).
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3) Conceptual Model of Social Capital
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Table on p9 – 11 of the pdf, or half way down the text is the punchline https://treasury.govt.nz/sites/default/files/2018-02/dp-18-01.pdf. Proposed Treasury Wellbeing Framework[8]
Housing
Living in satisfactory housing conditions is one of the most important aspects of people’s lives. Housing is essential to meet basic needs, such as shelter, but it is not just a question of four walls and a roof. Housing should offer a place to sleep and rest where people feel safe and have privacy and personal space; somewhere they can raise a family. All of these elements help make a house a home. And of course there is the question of whether people can afford adequate housing.
- Housing affordability
- Basic sanitation
- Rooms per person
Income and wealth
While money may not buy happiness, it is an important means to achieving higher living standards and thus greater wellbeing. Higher economic wealth may also improve access to quality education, healthcare and housing.
- Household net wealth
- Household income
Jobs and earnings
Work has obvious economic benefits, but having a job also helps individuals stay connected with society, build self-esteem and develop skills and competencies. Societies with high levels of employment are also richer, more politically stable and healthier.
- Labour market insecurity
- Earnings
- Long-term unemployment
- Employment
- Job strain
Social connections
Humans are social creatures. The frequency of our contact with others and the quality of our personal relationships are thus crucial determinants of our wellbeing. Studies show that time spent with friends is associated with a higher average level of positive feelings and a lower average level of negative feelings than time spent in other ways.
- Social support
- Volunteering
Education and skills
Education plays a key role in providing individuals with the knowledge, skills and competencies needed to participate effectively in society and in the economy. In addition, education may improve people’s lives in such areas as health, civic participation, political interest and happiness.
- Cognitive skills at 15
- Adult skills
- Educational attainment
Environmental quality
The quality of our local living environment has a direct impact on our health and wellbeing. An unspoiled environment is a source of satisfaction, improves mental wellbeing, allows people to recover from the stress of everyday life and encourages them to perform physical activity.
- Water quality
- Air quality
Civic engagement and governance
Trust in government is essential for social cohesion and wellbeing. Today, more than ever, citizens demand greater transparency from their governments. Information on the who, why and how of decision-making is essential to hold government to account, maintain confidence in public institutions and support a level playing field for business.
- Having a say in government
- Voter turnout
- Corruption
Health status
Good health is one of the most important things to people and also brings many other benefits, including enhanced access to education and the job market, an increase in productivity and wealth, reduced healthcare costs, good social relations and, of course, a longer life.
- Perceived health
- Life expectancy
- Suicide rate
Subjective wellbeing
Measuring feelings can be very subjective, but is nonetheless a useful complement to more objective data when comparing quality of life across countries. Subjective data can provide a personal evaluation of an individual’s health, education, income, personal fulfilment and social conditions. Surveys, in particular, are used to measure life satisfaction and happiness.
- Life satisfaction
Personal security
Personal security is a core element for the wellbeing of individuals, and includes the risks of people being physically assaulted or falling victim to other types of crime. Crime may lead to loss of life and property, as well as physical pain, post-traumatic stress and anxiety. One of the biggest impacts of crime on people’s wellbeing appears to be through the feeling of vulnerability that it causes.
- Homicide rate
- Feeling safe at night
Work-life balance
Finding a suitable balance between work and daily living is a challenge that all workers face. Families are particularly affected. The ability to successfully combine work, family commitments and personal life is important for the wellbeing of all members in a household. Governments can help to address the issue by encouraging supportive and flexible working practices, making it easier for parents to strike a better balance between work and home life.
- Time off
- Working hours
Cultural identity
New Zealanders have a strong national identity and a sense of belonging, and value cultural diversity. Everybody is able to pass their cultural traditions on to future generations. Māori culture is valued, practised and protected.
- Local content programming on New Zealand television
- Māori language speakers
4) indicators.
the following indicators are suggested to measure social capital as part of the Treasury’s LSF:
Table 1 – Overview of suggested indicators for social capital as part of the Treasury’s LSF
- Pro-social behaviour
- Civic engagement (behavioural)
- How and to what extent are New Zealanders demonstrating civic behaviours?
- Do levels and expressions of civic behaviour differ between groups in society?
- How is people’s engagement in civic behaviours tracking over time?
- Pro-social norms
- Generalised trust (attitudinal)
- What is the level of generalised trust in society and across groups?
- How is the level of generalised trust tracking over time?
- Feelings of unity
- Strength of national identity (attitudinal)
- What is the strength of New Zealand’s national identity in relation to other group identities such as those based on ethnicity, religion, region, etc.?
- How is the strength of New Zealand’s national identity changing over time?
- Institutional trust
- Trust in institutions (attitudinal)
Additional behavioural measures could include:
- tax compliance, and
- proportion of crimes reported to the police
- Do people trust society’s implementation-focused institutions?
- Do levels of institutional trust differ between groups in society?
5) More detailed papers
Value of New Zealand’s Human Capital
Covers Education, Health, Distributional issues
https://treasury.govt.nz/publications/dp/start-conversation-value-new-zealands-human-capital-html
Value of New Zealand’s Natural Capital https://treasury.govt.nz/publications/dp/start-conversation-value-new-zealands-natural-capital-html
Value of New Zealand’s Social Capital https://treasury.govt.nz/publications/dp/start-conversation-value-new-zealands-social-capital-html
Sheffield DPH 
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