Well-being
New Zealand recently unveiled what’s being described as the world’s first “well-being budget,” designed to improve the lives and living standards of all of its citizens. Maybe Vermont can claim credit for being the inspiration. While, unlike Vermont, New Zealand is fully integrating its well-being goals into the budgeting process and committing real money to its new priorities, there are echoes of a statute Vermont passed in 2012 in New Zealand’s well-being budget.
Here’s how New Zealand’s Finance Minister describes the new initiative:
“Budgets have traditionally focused on a limited set of economic data. Success has been declared on the basis of a narrow range of indicators, like GDP growth. But New Zealanders have questioned that claim of success when they have seen other things that we hold dear—child wellbeing, a warm, dry home, or being able to swim in our rivers and lakes—getting steadily worse. The old ways have left too many people behind. It is time to change. 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 Wellbeing Budget sets out to do.”
He goes on to explain that under the new budget process, funding requests were analyzed against the well-being goals—especially against the priorities of addressing mental illness, reducing child poverty and domestic violence, supporting minorities, and making long-term infrastructure investments.
In 2012, Vermont enacted a law[1] with similar aspirations. It says, in part:
“The state budget should be designed to address the needs of the people of Vermont in a way that advances human dignity and equity.…
“Spending and revenue policies will seek to promote economic well-being among the people of Vermont, and foster a vibrant economy. Integral to achieving the purpose of the state budget is continuous evaluation of the raising and spending of public funds by systems of outcome measurement based on indicators that measure success in accomplishing the purposes of the state budget.”
If New Zealand did borrow Vermont’s idea, Vermont might want to take a few tips from New Zealand on implementation. According to “The Wellbeing Budget,” the government substantially changed its budgeting process. Instead of just working within their own silos, cabinet officials and agency heads had to demonstrate how their budget proposals would advance the broader well-being priorities.
Vermont doesn’t do that yet. It’s making progress on performance measures in an effort to improve the effectiveness of programs and services. But we rarely see the governor or legislative leaders set specific long-term goals—to reduce poverty, increase wages, expand child care, improve racial equity—and then set revenue and spending targets designed to achieve those goals.
If Vermont’s political leaders fully embraced the idea of a well-being budget, it seems doubtful that the legislative session would have ended last week without final action on raising the minimum wage and on paid family and medical leave.
