Traditionally, a Government's annual Budget sets out its economic ambitions. But for 2019, New Zealand has been promised a "wellbeing budget" incorporating a broader set of indicators to measure the growth and success of our society.
Some might question how this approach to economic policy could ever work in Government, let alone apply to the private sector – particularly in industries like mine, which might be perceived as the alpha-male, heavy-lifters of construction and infrastructure.
Is it all too wishy-washy? Or simply too hard in a world of tight margins?
Actually, there are many ways any business can influence wellbeing beyond paying a wage, and I believe it's time that those which do are incentivised and rewarded for their actions.
What's more, contributing to social outcomes that enhance wellbeing can be measurable and achievable. In contracting you can evaluate a business' contributions as part of a tender. So, perhaps surprisingly, some contractors in construction and infrastructure are already getting on board with this kind of thinking.
Consider the ways the following can impact on people's lives, at an individual, whānau and community level: paying a Living Wage to our lowest paid workers; providing education and training so people's skillsets can expand and stay relevant; investing in community-based suppliers so they can reinvest locally; encouraging Māori, women and Pacifica owned suppliers so they can grow the wealth and capability of their whānau and community; reducing carbon emissions and waste so we can halt the degradation of our environment.
Many reputable New Zealand businesses in the construction and infrastructure sector choose to go beyond what is statutorily required to do better on all these fronts.
If the by-product of a profitable business is more tax (via profit), well-paid jobs and sustainable outcomes then that business is creating a far greater social surplus
There are objective, credible ways of recognising their efforts, particularly when it comes to negotiating major contracts. Positive social and environmental outcomes can now be measured, indexed, and fiscally quantified.
The challenge has been that with lowest price-conforming models for contracts, how do buying agencies encourage and value private businesses that invest in social outcomes? If we can incorporate quantitative measures into our contracts that evaluate a business' contribution towards social outcomes – essentially making efforts to enhance people's wellbeing and happiness – we can incentivise actions that enrich our communities and reduce inequality.
In some regards, we are paying forward by investing in social outcomes via our supply chain. Considering more than lowest-price in contracts helps to address some of the wider challenges that all taxpayers fund via social welfare, health, prisons, education and directly by communities.
Firstly the Government needs to make its own supply chain a model for positive social outcomes. With a record $104 billion spent in 2018 by local and national government within New Zealand, our buying agencies have a significant opportunity to define and implement wellbeing through valuing and rewarding the work of suppliers.
There is a direct return for the businesses too. Those that choose to invest in their people, suppliers, and community will establish significant market relevance and profitability for the long-term. Yes, growing a profitable business is always the goal. But if the byproduct is more tax (via the profit), well-paid jobs and sustainable outcomes at the same time, then that business is creating a far greater social surplus.
There will be questions of affordability in embedding social outcomes in contracts. However, from my experience, reputable contractors are already initiating this but they are getting penalised at the tender box on price, and losing out to suppliers who are not investing in the future of New Zealand in the same way.
* Warner Cowin is founder and chief executive of Height.