With this year’s Budget announcement just days away, New Zealand waits for confirmation of the approach the new government will take as they balance the agendas of all three parties for the needs of a changing nation.
For the first time, we expect kiwis will see New Zealand’s first ever ‘wellbeing budget’. This takes a look at the full picture - socially, environmentally and economically - around what changes can be made that will have a real impact for New Zealanders.
Put simply, our prosperity as a nation cannot be measured by the performance of our economy alone, we need to also look at the wellbeing of our people, our communities and our culture. The Treasury’s Living Standards Framework says there is an intrinsic link between wellbeing, productivity and growth. Our infrastructure is often considered the ‘backbone’ or our economy, but this year we’re expecting the government to take a more holistic view than ever before.
Our people will be at the heart of a budget focused on wellbeing, and rightly so. Child poverty will be an important part of the discussion, as will the health of our communities. We expect to see consideration of things like the social isolation of our elderly and other groups, alongside steps to continue to protect and nourish the contribution Māori communities have on our social capital.
The importance of these social objectives are not lost on the New Zealand business community, nor are the risks we will face should the current inequalities not be addressed and there be any further deterioration in social cohesion in New Zealand.
The Government will be facing tough decisions on where to focus their efforts. This is an extremely relatable position for New Zealand businesses, who are having to respond to change and disruption themselves and know that when business are trying to make changes, they have to protect their income sources not only so the cost of change can be funded but also remain sustainable.
This balancing act is no different for Government. We’re expecting an ambitious, passionate budget addressing social, environmental and infrastructure issues that will need a level of certainty of tax revenue to support and fund initiatives.
With this in mind, it will be crucial to ensure the major sectors of New Zealand’s productive economy remain engaged and empowered to succeed, and that policy settings do not result in reduced economy activity which would in turn reduce tax revenue to fund the Government’s programme. If policy changes go too hard across our largest areas of the productive sector, the scales will be tipped and the certainty of this revenue will be endangered.