What does it mean for business?
The Wellbeing Budget’s intent is to focus beyond just the normal economic and fiscal measures that a budget would normally be judged against, and to use the Treasury's “Living Standards Framework” to inform the Government's investment priorities and funding decisions. Simply, this is about measuring and reporting against a broader set of indicators to show a more rounded measure of success, rather than just focusing on Gross Domestic Product. The “four capitals” in the Living Standards Framework – natural, social, human, and financial and physical – are central to this new way of measuring.
The priorities for the Budget were set in advance through the Government’s Budget Policy Statement. These priorities are designed to deliver against this new broader set of measures. For this Budget, the priorities are:
Ministers and government departments were therefore asked to show how their funding bids contributed to these priorities, and funding was allocated on the basis of their impact against achieving those priorities.
There are four main things for businesses, in this budget, most of which flow from the first two Budget priorities listed above:
The increases in operating allowance and the move to a four-year capital appropriation means we should expect to see continued increased spending in future Budgets.
While not cemented in place in this Budget, the use of wellbeing indicators should become law over the course of this Government’s term through proposed changes to both the Public Finance Act and the State Sector Act. These proposed changes in legislation could have a material impact on the long-term path of future Budget investments, no matter who is in Government. We ought to know more about what that will look like by the time we get to next year’s Budget, so for now we must continue to wait to find out what the longer-term, and more-enduring, impacts of the “Wellbeing Budget” will be.
* Note that all operating funding figures are for the four-year planning horizon.