Treasury looks past money to gauge happiness

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Treasury is making a move towards measuring the happiness of Kiwis in a bid to improve its policy advice to the Government and respond to its critics.

The department yesterday published the results of 18 months of research on a living standards framework that emphasises goals and measures beyond economic growth - such as contentedness, the value of unpaid work and leisure time.

"Treasury's role as a central agency with oversight over all significant policy issues across the state sector has also led it to acknowledge that living standards are broader than income alone, and are determined by a wide range of material and non-material factors," said the report, titled Working Towards Higher Living Standards for New Zealanders.

The work on living standards was part of internal efforts to enhance policy advice and respond to criticism that Treasury paid insufficient attention to whether higher incomes were the ultimate objective or a way of increasing happiness, the report said.

The report said the framework would improve Treasury's ability to provide ministers with robust advice on economic, fiscal and regulatory issues and on significant policy issues in the wider state sector.

Ross McDonald, a senior lecturer in the University of Auckland Business School, said the report showed New Zealand was joining a growing movement internationally away from using economics alone to measure a nation's wellbeing.

"We've got to get out of the mindset that sees growing economies as our ultimate purpose in life," said McDonald, who has made several research trips to Bhutan, where the term Gross National Happiness (GNH) was coined by a former king in the 1970s and has been used a serious indicator of the Himalayan nation's wellbeing since the 1990s.

"There's quite a serious disconnection between growth in GDP and any growth in self-reported happiness."

He said changes in policy resulting from the report could involve work towards lowering the indebtedness of New Zealanders and lessening the pressure on people to work ever increasing hours.

"As the cliche goes, few people on their deathbeds regret spending less time at the office."

- Additional reporting NZPA