Frank Greenall: Budget puts wellbeing first

It's false language used to describe false economics, but most don't see any dichotomy.

THE last Labour Prime Minister who had genuine blue-collar "working man" dirt under his fingernails was, of course, Norman "Big Norm" Kirk, nearly half a century ago.

His early labouring and mechanics jobs exposed him to hard manual graft, and we also know how he regularly cycled to Kaiapoi from Christchurch with assorted materials strapped to his bike for the family home he himself was building. (The house is still going strong.)

Most are also familiar with his famous quote: "People don't want much, just someone to love, somewhere to live, somewhere to work and something to hope for."

It pretty much sums up what the Labour Coalition Government hopes to achieve with its Wellbeing Budget.

It's touted as a world first, and perhaps it technically might be inasmuch as it may be the first Government to use that particular budget label. But the concepts behind it have been tossed around for decades under such proposals as genuine progress indicators (GPIs), and the like.

This includes our own Treasury, which in 2011 was directed to construct a Living Standards Framework for measuring the success of the economy.

Underlying all these initiatives has been the recognition that society needs some other yardstick rather than the crude measure of gross national product (GNP), which simply measures the amount of economic "churn" happening in the economy over a given period.

Claiming that the economy is full steam ahead because the books show lots of transactions being made is patently absurd, given that many of those transactions may relate to natural or environmental disasters, police and prison operations, traffic accidents, and so forth.

Frank Greenall

A busy GDP was the pretext that allowed John Key to claim the economy under his Government was at "rock star" level, when all around him were families increasingly struggling with housing and basic bills, and major infrastructure was haemorrhaging.

But old habits die hard. When many commentators discuss the ramifications of the 2019 Budget, for example, they warn against putting economic "growth" at risk in favour of pursuing metrics such as better housing, health or social cohesion, as though the two dynamics are mutually opposed.

It's false language being used to describe false economics, but that terminology has become so ingrained over the decades that most don't see any dichotomy.

Frank Greenall

Any "economy" only exists for the advancement or otherwise of its constituents. To claim an economy is in growth mode simply because GDP figures are busily churning, while at the same time a good chunk of the population is going to rack and ruin, is simply fraudulent.

A simple case in point: in a post-budget analysis by a panel of proverbial experts, it was argued that continuing high immigration levels to Auckland was still the main driver behind economic "growth" in the region. No mention whatsoever of any of the down-side downstream effects of continuing to overload local infrastructure with what is in effect an artificially stimulated population blow-out. Namely, the loss of quality of life through increased housing pressures, traffic congestion, general strain on government agencies, schools, and the like.

If for nothing else, the Wellbeing Budget may play a very valuable role in simply changing the concept of things economic to better reflect constituents' primary concern — namely, measurement of overall everyday quality of life.

In terms of Big Norm's simple denominators for a ticket to what used to be regarded as almost a birthright Kiwi way of life, the Wellbeing Budget came up short.

For example, the ongoing housing crisis — abetted by a highly flawed KiwiBuild — hardly received a mention, yet exorbitant house prices and rents are the main culprits in decimating discretionary household spending.

But in changing the collective consciousness — particularly with the economist coterie — at least it's a start to using language that reflects real quality of life advances.

False accounting figures that fail to factor in downstream collateral damage no longer cut the mustard.