Public Finance (Wellbeing) Amendment Bill

I move, That the Public Finance (Wellbeing) Amendment Bill be now read a third time.

What a great day for New Zealand, that today we include in our public finance framework a world-leading approach to understanding, supporting, and being held accountable for the overall wellbeing of New Zealanders. While, on the other side of the House, we have a party stuck in the last century, unable to see what really matters to New Zealanders, on this side of the House we are passing progressive legislation that will mean that, from now on, Ministers of Finance will be obliged to report on the overall wellbeing of New Zealanders.

Now, we’ve done that as a Government in Budget 2019, and we did that because we believed it was the right thing to do. The framework that we have based that on is a robust analytical framework. Treasury’s Living Standards Framework is drawn from the OECD’s quality of life index. It covers four capitals. When we go out and we talk to New Zealanders about this, it’s better not to use the language of economists—with all due respect to economists. But that robust framework is there. So that is financial capital, that is natural capital, that is human capital, and that is social capital. If you want to translate that into people’s everyday lives, that is about the money, the environment, the people, and the community. It’s about the health of all of those. It’s about how they’re tracking in terms of your own health status, your educational status, how safe you feel. It’s about our environment—how clean our water is, how clean our air is. It’s about making sure our communities are connected to one another. It’s about trust in Government. It’s about making sure that we are a prosperous country that manages its finances prudently. It is all of the things that make up our success. Of course our Budget should report on that. The fact that it hasn’t is a gap, and the fact that it hasn’t and we are changing that today is something to celebrate.

But, in addition to that, what this bill does is uphold the principles of the Public Finance Act as passed through this House in 1989. That is a level of rigour and independence that you don’t see in many other countries. So the Public Finance Act, and this has been a cross-party view since the late 1980s, incorporated the Fiscal Responsibility Act. What that means is that we report more often as a country about the state of our finances, about the long-term plans for our finances and our fiscal position than almost any other country in the world. Here today, in Part 2 of the bill that we’re passing, we’re putting the responsibility on Treasury once every four years to take a broad sweep of wellbeing. So every year the Government of the day does it against its objectives—we’ve done that; all Governments will need to do that based on what they believe the wellbeing objectives should be. But then, every four years, Treasury takes a step back and it says, “How are we going as a country?” They may well measure differently than the Government of the day. And that’s important because that’s their job: to take that step back and say, “How is New Zealand doing against a wellbeing outlook?” This is an important piece of legislation in my view, because it takes New Zealand a step forward. Yes, we have to look after the dollars and the cents; it is essential. But we also have to value the other things that New Zealanders value.

I’ve told this story often. In the 2017 election campaign, when I was out there talking about this concept, I was in a room of lawyers in Auckland and we were discussing it and they had a look on their face similar to Andrew Bayly’s right now. So I stopped what I was talking about and I said, “What matters for you? What matters for you and your children?” And one of the lawyers said, “Well, it’s their health. I want to know that they’re going to be healthy.” And then another—an interesting comment—of the lawyers said, “I want to know that my children have friends.”, which I thought was an interesting response from a lawyer. And another person said, “I want to know that they’re going to get a good job so that they can look after me in their retirement.” All of these represent different things that people feel matter to them and matter to their families. So this is not something that’s well outside of the mainstream. It’s actually about reflecting back to New Zealanders how they feel about what is success. And so, for me, this is a piece of legislation that is actually something New Zealanders want to see us do when it comes to the way we measure success and the way we put our Budgets together.

I’d also just say that this concept around wellbeing is now being picked up by a number of people in the corporate sector. Two of our largest banks have embraced this. Westpac now runs a regional wellbeing series where they go around New Zealand using Treasury’s Living Standards Framework, looking at wellbeing on a regional basis. I’ve attended some of those; they’re fascinating. They bring people together and have conversations that have not been happening. Westpac understand that that matters. Now, they are a bank, they are fundamentally about the dollars and cents, but they know that the dollars and cents don’t mean anything if they’re not connected to the outcomes that people want in their communities. The Bank of New Zealand has established its own wellbeing index and they survey their customers on a regular basis. And that includes things like housing, like their physical safety, like the quality of the environment. So it’s now understood within the corporate sector that these things matter.

So this piece of legislation reflects where New Zealand is today. It’s what New Zealanders want. They don’t see success as just being in a financial balance sheet sense. Yes, that matters, but in addition to that, it’s about the success that we have as people in our communities protecting our environment. So I am proud of this piece of legislation, I am proud of the fact that this Government has put together wellbeing Budgets, and I commend this bill to the House.

Thank you, Mr Speaker. It was very telling, indeed, that the Minister of Finance opened his contribution in the third reading of the Public Finance (Wellbeing) Amendment Bill by saying and congratulating himself and his Government for the fact that this was a world-leading approach to wellbeing. Actually, what about a world-leading delivery of wellbeing to every single New Zealander?

The interesting thing is this overall fascination with being world leading. Actually, what New Zealanders—definitely in my electorate of Taupō right now—want to see is local results, local outcomes. They want to know they’ve got a Government that is focused on them, not some aspirational kind of world-leading approach—

💬 Alastair Scott: Fluffy.

“Fluffy”, as one of my colleagues says. They want to see that the Government is focused on them. They want to know the Government is focused on them and improving their quality of life. So yep, Treasury’s Living Standards Framework—no disagreement around how important that is. It was created under the Rt Hon Bill English’s leadership. There’s no argument about that, that it is the Government’s job to improve the quality of people’s lives and their standard of living and their wellbeing. To actually, though, put it in the Public Finance Act and then expect economic analysists at Treasury to measure it and report on it are two very, very different things. So, on this side of the House, we are more interested in delivery and more interested in the outcomes for New Zealanders than about the Prime Minister or the Minister of Finance today seeking accolades on the world stage. That is not what a public finance piece of legislation for New Zealanders should be about.

We absolutely agree that the Government should have a broader focus than GDP and there are other measures of success. One of the measures of success for many people is how we get through a crisis as a country. So the people of New Zealand—taxpayers of New Zealand, families, children, seniors, retired people—actually want to know that the Government is focused on them and improving their quality of life. Fundamentally, what does that mean? Fundamentally, it means having a strong economy. Having a strong economy is about affording the things that New Zealanders want—whether it’s health, education, or infrastructure. Unfortunately, what we’ve got now is a Government that likes to talk big, talk about world-leading approaches, 100,000 KiwiBuild houses, and light rail in Auckland by 2021. What actually matters to the quality of people’s lives and their standard of living is the Government’s ability to deliver—whether it’s housing, whether it’s public transport, whether it’s public health, whether it’s making sure that every single person that leaves isolation is tested, because those are the things that make a difference to New Zealanders’ quality of life.

So National doesn’t support this bill. I’ve had colleagues who’ve said, “How do you define wellbeing?” and that this is a piece of fluff. Actually, we want legislation and we want the time of this House to be focused on things that make a difference to New Zealanders’ lives. To suggest that previous Governments haven’t focused on wellbeing is, quite frankly, unbelievable and outrageous. To suggest that former Labour Governments haven’t focused on wellbeing, that former National Governments haven’t focused on wellbeing is clearly, clearly untrue.

If you look at things like the Better Public Service targets that were introduced by the previous National Government, that was always about accountability. It was about a whole-of-Government approach, and it’s really sad to hear scoffs from the other side. They’re clearly not interested in lifting immunisation rates, lifting educational achievement. Educational achievement, particularly if you look at what we saw in the lifting of educational attainment for Māori and Pacific—because if there is one thing that improves somebody’s opportunity in life, it’s education. That is absolutely the leveller, no matter what your circumstances, no matter what your background. If we’re able to ensure that more of our young people leave school with a great education, it provides greater opportunities. That is a sort of tangible, measurable outcome that we want to see for New Zealanders.

What we don’t want to see is by merely dropping the word “wellbeing” and a “wellbeing approach” and putting “wellbeing” in front of your Budget and have a “wellbeing report” every four years doesn’t necessarily mean any change at all for New Zealanders and their quality of life. That’s why it’s just really unfortunate that we’re debating a piece of legislation in the House in urgency that, quite frankly, might make zero difference to New Zealanders. That’s why it is a bit of a tragedy.

We all know the significant impact that COVID-19 has had on families and business and communities. What we want to see is competence in shifting results and getting better outcomes for those most hard hit by this. We want to see that the Government is delivering the core elements of what they define as wellbeing: having a job, a place to live, getting a good education, having great health, having a healthy environment, but, actually, this bill doesn’t deliver any of that—none of it. Actually, if we look at the last week alone, whether it’s inability to build houses, whether it’s inability to get a public transport project off the ground that I know, in particular, the Greens were passionate about, or whether it’s about making sure that everybody in quarantine gets tested, this is a Government who’s proven time and time again they can’t deliver.

So it’s not about having legislation that’s world leading; it’s actually about having a country that is governed by Ministers who not only talk big but actually we want them to deliver big. Actually, every New Zealander, particularly now, wants to know that’s what the Government is doing. They want Treasury to be able to focus their efforts on ensuring the Government, based on good economic advice, is making good decisions about spending. It’s not just about—and that’s what one of my colleagues read out in terms of the Wellbeing Budget—“big dollars”. It’s actually not about being able to say, “We spent more than the other lot.” If the quality of the spend doesn’t deliver results and outcomes for New Zealanders, it ain’t worth the paper it’s printed on.

That’s why it’s quite sad, actually, when Governments gone by of each side of the House have focused on improving New Zealanders’ quality of life, to then have a word “wellbeing” stuck into the Public Finance Act, and the Minister of Finance thinks this is going to be the big life changer for all New Zealanders because wellbeing, as a word, is put into the Public Finance Act—it’s actually a bit tragic.

New Zealanders want to see that Treasury is focusing their efforts on good advice, on good forecasting so that the Government of the day has the best information on which to make decisions—so whether it is, in more recent times, Treasury’s forecasts on unemployment rates, which I think, based on the IMF’s recent projections, they’re going to have to go back and amend. And the OECD figures don’t agree with Treasury or the fact that Treasury thinks we’ll get back to pre-COVID levels of unemployment by 2023—I don’t think too many people would actually agree that that’s possible. But Treasury needs to be focused on ensuring Government spending is effective, on providing sound advice, and on making sure that there isn’t wasteful spending, that actually money that is spent—of which it is taxpayer’s money; it’s not the Government’s—is spent effectively and it delivers results. Our focus absolutely must be on ensuring a sound economic base of which our country is born, because it is that and that alone that improves the wellbeings and the living standards of all New Zealanders.

It was 31 years ago that this side of the House introduced the Public Finance Act. It’s been interesting over the course of the period that this Public Finance (Wellbeing) Amendment Bill has been before us in the Finance and Expenditure Committee. I want to acknowledge my colleagues over the other side of the committee. We’ve had the opportunity to hear from economists, from Treasury, and from a whole range of very interested stakeholders as to exactly how this bill, and particularly the measures that we are introducing—it is about how we measure wellbeing.

To take the point of my learned friend who just spoke prior, Louise Upston, she was concerned that we were introducing a bill that was a mere piece of fluff. Look, she didn’t sit on the Finance and Expenditure Committee; so she didn’t have the opportunity to engage with some of the incredible minds that we did, and I look forward to some of the contributions from other colleagues that have been engaged in these discussions since last September. But the key task before us was: how do we measure; how do we ensure that we are measuring the right things when it comes to making sure that all of—the whole—person, all of the community, and all of the things that we value dear to us are being measured and attributed, tracked and, if I can say, traced? How can we ensure that we are doing that?

This bill is a simple bill, but it is something that’s taken a long time to get to this point. We were in a position to be able to implement a measurement, a yardstick, by which we can ensure that we are measuring the wellbeing of New Zealanders across multiple fora, not just the mere fiscal GDP measure, which we all know is a blunt tool, and there have been numerous speeches in this Chamber over the past 2½ years speaking to that extent—so I won’t go into those any more—but the key task here was, right, we know that there are other things beyond GDP that go towards the way that we as a nation need to feel well as an overarching society.

So Treasury developed the Living Standards Framework. They did that under the last lot. This bill—

💬 Andrew Bayly: Last lot?

The last, honourable Government—it was a long time ago now. So it’s good that we can implement and put into law actual yardsticks by which we can measure things that now require the finance Minister—they every year are going to have to come back to this Chamber and account to how we are tracking when it comes to these environmental wellbeings, how we are tracking when it comes to these cultural wellbeings, economic wellbeings, and the like.

Now, our friend who hasn’t been a part of these conversations—the honourable member for Taupō—seemed to get a little tied up and a bit concerned about how the rest of the world was seeing this. Well, a lot of people are looking towards New Zealand because they want to understand how we have implemented these measures, and rightly so, because people know that GDP has been a blunt measure. It’s not sufficient; it’s an insufficient tool to track how we can measure the things that we need to in our modern day society. So we are at the precipice and we have been, as we were when we introduced the Public Finance Bill back in the late 1980s—we, at that point too, were at a point which many other countries looked to because it was a radically new way of measuring and putting a yardstick to the public sector, effectively.

Well, now we’re doing this again. It’s been a long time between drinks, but rightly so. I am incredibly proud of our finance Minister, the Hon Grant Robertson. This has been something that he has championed since long before he was in the position that he is in now. He’s now in a position to give full credence to the aspirations of the Living Standards Framework, and he’s doing that by way of this Public Finance (Wellbeing) Amendment Bill. This is an absolutely incredible day for New Zealand and one we should all be proud of. So, without further ado, I commend this bill to the House.

Thank you very much, Mr Speaker. As has become evident, National will be opposing this bill. I just want to say at the outset that National is absolutely committed to improving the wellbeing of New Zealanders, and when I say that and use the word “wellbeing” in that context, that means a holistic, wide approach.

I acknowledge the previous speaker, Kiritapu Allan. There’s always been concern about GDP being an appropriate measure, and maybe we are preoccupied by it, and most indices used to measure countries around the world, obviously, revert to that. So the issue of how, as the Government, we best devise policies that make sure that all New Zealanders, and particularly vulnerable New Zealanders, are looked after, catered for, and have their situation improved over time is the conundrum of all Governments.

So, with that context, when National was in power, we were very, very focused on measuring—well, first of all, setting objectives, and then measuring them and being accountable for them. I know there have been some comments made about that. The only thing I would say to people is that, if anything, you might have accused National of being preoccupied about setting objectives and measuring them and trying to be accountable for them. I’ve never met anyone who said to me that National was soft and flabby and never sought to put in place good objectives and to actually make sure we were accountable. I’ve never heard anyone say that to me.

Some of the targets that we put in place, just to give an indication of the extent of them—and not just purely financial measures, but we had very specific measures around reducing welfare dependency, increasing participation in education and early childhood education, infant immunisation rates, reducing assaults on children, NCEA qualification rates, reducing total crime, reducing reoffending. So you can sort of see—that’s just some examples of some of the ones that we had. Underneath each of those areas, there was a whole raft of quite specific measures. The thing I would say to all members: the hardest thing about putting in this type of framework is actually having the intellectual grunt to work out what are the key drivers that, if you measure it, will actually result in change. It’s very easy to set easy targets, but they don’t actually drive particular outcomes.

When we were talking about the bill in the committee of the whole House before—there’s, obviously, a requirement under the bill for the contents of the Fiscal Strategy Report to, first, explain how the wellbeing objectives have guided the Government’s Budget decisions, and, secondly, if the wellbeing objectives that guided the Government’s Budget decisions differ from those indicated the Budget Policy Statement, to indicate those differences. So I went to the Wellbeing Budget, and the last one I could find was the 2019 one. As I indicated before, the thing that I find most alarming about this approach, and if the Government is set on adopting this—and, obviously, this bill will pass through today with Government support members all coming together on it. The targets that were specified in the Wellbeing Budget, I have a problem with them, because, as I have talked about before, the first one I come across is “A new frontline service [measure] for mental health with a $455m programme providing access for 325,000 people by 2023/24”. So that is a financial measure. That’s about how you spend money. That’s about saying “We’re going to spend lots of money”. It doesn’t necessarily lead to better outcomes.

I know that there’s a lot of argument that even though the Government has announced a $1.9 billion spend in mental health and has probably only spent $27 million, if you just subtract that from the moment, this as a target is meaningless. All that just says is “We’re going to spend lots of money.” It doesn’t measure the outcomes, and that is the thing that I find really, really concerning, because if that is the trend of how this is going to be used in future Budgets, whether by the Labour-led Government or by National, I think we will be making substantial changes, because I think everyone in this House wants to see improvement in the lifestyle, the life situations, of many of our most vulnerable, and that is not the type of thing that’s going to achieve that. I think, with that sort of background, I just can’t see how we can actually move forward with this.

The Living Standards Framework—the previous speaker spoke about this. I am a member of the Finance and Expenditure Committee. I did listen carefully to the range of economists, and the thing that came through very clearly in their discussions with us, and they were well considered, was, essentially, we are at the bleeding edge of trying to develop this framework, and even they are not in a situation where it is defined enough. It’s an exciting concept, but it hasn’t reached the level of detail that is necessary to be able to put this into a Budget statement and use it. We talk about human capital, we talk about physical capital and all these different—there are actually four of them. But the lack of detail around it is a big issue.

If anything, I think this bill is probably premature, because if I look at how it’s been used previously, I don’t think it’s leading to better outcomes. Certainly, you couldn’t look at any of those measures and say how that will improve the mental health of people or child poverty rates, which are also specified in there. All I’ve seen is that, actually, rates are going the other way, unfortunately. I think we need to get to a situation where we can have a holistic conversation around how we’re going to achieve it. But the biggest thing and the biggest challenge is actually setting meaningful objectives and KPIs and delivering them, which is the ultimate outcome.

So the issue around delivery is actually crucial, and I know my caucus members are going to talk further on that, but as I’ve said before, this is one of those bills that makes you feel good and it provides a warm glow, but, unfortunately, it’s a warm glow of incompetence.

New Zealand First rises to support this bill, because it does mean the Government will have to take in a broader suite of parameters in the construction of its Budget process, and there is more transparency in the accounting around that broader suite of measures, as has been acknowledged by the previous two speakers. GDP is a blunt tool, and even the gentleman that devised it and came up with the model warned against using it too prescriptively. And we’ve seen recently in the past, in terms of GDP, when we’ve had quite high GDP but we’ve had rising inequality, and when we had what was called a rock star economy, we had so many people falling out the bottom. So we have seen first-hand, in very recent times, where a myopic focus on GDP has not served us well as a country. So it does give more accountability on things like environmental outcomes, social outcomes, and cultural measures. We have seen in the past—not just the recent past but deep, dark in the past—that the Nordmeyer Budget, the Black Budget, of 1957, I think, was a famous Budget. I don’t think even Winston was in the House then, but it endures today as a—

💬 SPEAKER: Order! One, the year is wrong, and, two, the member shouldn’t refer to his leader that way.

OK. The Rt Hon Winston Peters wasn’t in the House—that could’ve been a career-limiting slip. Thank you for pulling me up, Mr Speaker. And we saw, of course, Ruth Richardson’s “mother of all Budgets” in 1991, and I think that under these parameters it would be much more difficult for future Governments to take that short-term slash-and-burn type of mentality. And, of course, the Key Government also had a myopic focus on getting back to surplus that did see us sweat assets. We had a rising population and investment into our public services being either frozen or shrunk in many cases, or certainly not growing at the level the population was, and, as I said before, many people were falling behind. It’s a mess that we’ve had to clean up to a larger degree.

I think the environment is conducive to bringing this in because we are running up, in the response to COVID, a significant debt—by international standards still relatively moderate—from where we’ve come from. So the environment is there if a future Government takes a slash-and-burn approach, should they feel that was their priority at the time, and this overarching framework will put some checks and balance around that. It will make them report and take into account this wider suite of measures. As the Minister said, there’s been some criticism from the Opposition about not codifying what those specific targets might be, but it is up to future Governments to set their own targets. We’re going with the Living Standards Framework that was set up under the previous Government, and we’re evolving them and using them as a measure, and I think that’s appropriate, but future Governments may wish to move on that. But they will have to report on outcomes.

So this is modern and, in many cases, world-leading, as we’ve heard before—although, it’s not, really. I mean, I think Governments are lagging in this respect. If you look at the commercial world, it’s pretty standard for leading companies to report on a triple bottom line. So it is the way that the world is going, and it’s only right and proper that Governments that have such a wide-reaching effect on the health and living standards of a nation should do the same.

So I commend Minister Robertson. This will be an enduring measure that will be part of his legacy, and I know he has long championed this. I commend the Finance and Expenditure Committee for working through this, and New Zealand First will support it in the House. I think when this Government was formed, the Rt Hon Winston Peters talked about returning the human face of capitalism, and this bill takes us exactly in that direction. Thank you.

Thank you, Mr Speaker, and always a pleasure to follow the New Zealand First member Mark Patterson. I listened intently, in the hope that I might find out what wellbeing actually means.

I want to start by saying that, at a time of absolute economic crisis, at a time of absolute Government incompetency, this House is in urgency adjusting the Public Finance Act and putting in this notion of wellbeing. Throughout the committee stage, Opposition members asked the Minister Grant Robertson on many occasions what is meant by wellbeing. And the Minister himself is unable to tell this House what is meant by wellbeing. He did say Treasury’s working on it, and I actually feel very sorry for Treasury having to have this imposition put on it, and I want to talk later about the potential to politicise Treasury through this very piece of legislation.

Let’s start by dealing with the current crisis this Government finds itself in. It campaigned strongly three years ago to deliver three flagship policies. One was light rail in Auckland, the other was KiwiRail—and what has happened to light rail?

💬 SPEAKER: Order! I’m just reminding the member we’re on the third reading of the bill.

We are indeed, Mr Speaker. I raise a point of order, Mr Speaker. What I’m attempting to do, Mr Speaker, is explain that, while we’re dealing with this legislation, which defines wellbeing into future Budgets, I’m talking about the lack of performance on the Budgets already set by this Government.

💬 SPEAKER: And the member is out of order. We are discussing the bill as it has come out of the select committee; we’re not having a Budget debate.

Mr Speaker, I will accept your ruling, obviously.

With regards to the bill, Part 1 talks about the wellbeing objectives. We would expect the Government members, then, to be able to define the wellbeing objectives. So I’ve referred to Google: “Wellbeing is the experience of health, happiness and prosperity. It includes having good mental health, high life satisfaction, a sense of meaning or purpose and the ability to manage stress. More generally, wellbeing is just feeling well.” Well, if Mr Speaker is any the wiser now on what wellbeing means—and what Part 1 of this legislation, “Wellbeing objectives”, means—he’s a better man than I am. Whilst we note the definition of wellbeing then refers to having good mental health, that does give me the opportunity to refer to Budget 2019, and Grant Robertson used this as an example of the first ever wellbeing Budget, the $1.94 billion being directed by the Government last year to mental health. So the question was asked then, in the committee stage, how much of that money, in the very first wellbeing Budget, had ever been spent, and the answer was around $24 million.

What we’ve got is wellbeing objectives being incorporated into the Public Finance Act so that future Budgets presented by Governments must take into account this nebulous concept of wellbeing. We just cannot find a definition to wellbeing, and even the Minister himself, in Part 2 of the bill, points out that it will become a responsibility of the Minister to present the report to the House at least every four years—at least every four years—but that it’s the Treasury’s responsibility to write the report, with the concept of wellbeing being incorporated from the Living Standards Framework.

One of the questions I asked of the Minister is: if this is such world-leading legislation, the first Budget ever to be incorporating wellbeing, what other countries are following? And he said, “Well, there are numerous other countries.” Well, I can’t find another country anywhere in the world that’s now delivered a wellbeing Budget. He spoke about Canada. So I had a look at Canada, and, no, they haven’t produced a wellbeing Budget; what apparently the connection the Minister has with Canada is is that he received a phone call once from a junior Minister in the Canadian Government, and that Minister was interested in the fact that New Zealand was putting wellbeing into Budgets and wellbeing into the Public Finance Act. That doesn’t suggest to me for one minute that other countries are rushing to follow the New Zealand example.

If it was so important to put it into Budget 2019, where was the mention of wellbeing in Budget 2020? So is the Minister going to argue the reason it wasn’t in Budget 2020 was that he hadn’t had time to pass the Public Finance (Wellbeing) Amendment Bill? Well, he managed to put it into Budget 2019 without the legislation; so why couldn’t he put this wellbeing concept into Budget 2020? The answer is he could have if it was important enough. So what we’re seeing is an absolute incompetence here in the House today. He pushed the House into urgency to pass this piece of legislation, which, at best, can be described as fluffy nonsense. He pushed the House into urgency today to do this legislation when there are far more important issues that are facing the Government.

I want to conclude by saying that I have sat through many Budgets being presented by both Labour-led Governments and National-led Governments. There would not be any of those Budgets presented to this House that didn’t focus on what the particular Government of the day would deliver in terms of outcomes for New Zealanders that were appropriate. And while wellbeing, according to the definition, suggests that people should be happy with the Budget that’s presented, no Government will ever, and has ever, presented a Budget that makes everybody happy. That’s not the role of the Government; the Government’s job is to present a Budget that it thinks will deliver the best outcomes to New Zealanders—nothing about the fluffy nonsense of wellbeing.

So I say that Treasury has been handed something that will be difficult for them with this legislation. They have the responsibility now of developing the criteria around the definition of wellbeing. The Minister himself can’t give it to us; none of the Government members who have spoken in the debate so far have told us what wellbeing means. It hands the responsibility to Treasury, which I say is a respected organisation responsible for delivering independent fiscal and economic advice to the Government of the day. But what this potentially does is it will require that Treasury officials, effectively, start commenting on Government policy. I know that that was a concern raised throughout the select committee process as this legislation went through the Finance and Expenditure Committee. I think it’ll be a sad day indeed if this legislation passes today and the effect of the passing of that legislation is then to put Treasury in a position where it becomes politicised, and I think that is a very grave danger with this legislation.

So I want to conclude by saying that, at a time of crisis, at a time of total incompetency, at a time of complete unhappiness on the other side of the House at their own performance, here we are in urgency ramming through legislation that I don’t think will be able to deliver what the Minister suggests it will.

Tēnā koe e Te Māngai o Te Whare. I am very pleased to speak on behalf of the Green Party on the Public Finance (Wellbeing) Amendment Bill. The previous speaker, Rt Hon David Carter, called it fluffy nonsense. I think that shows National’s very narrow approach to economic matters. It’s not really interested in economic policy that delivers a healthy environment. It’s not interested in economic policy that provides for people’s wellbeing. Economics 101 is that oil spills like the Rena in New Zealand and the Exxon Valdez lead to an increase in GDP because of the economic activity around cleaning up the oil spill. But do they enhance the wellbeing of people or the wellbeing of nature? No. This is why this bill is important, because it is going beyond the narrow gauge measure of GDP to look much more widely at how our economic policies benefit New Zealanders and benefit our cultural life and benefit the environment.

The bill has a long history in ecological economics. I recognise the work of Kennedy Graham, who, when he was a member of this House, drafted a member’s bill, the Public Finance (Sustainable Development Indicators) Amendment Bill. That then passed into the name of James Shaw. It was introduced and pulled from the ballot in 2016, but the former National Government voted that bill down because it prefers just to rely on measures like GDP. It wasn’t concerned that, under its economic policy, we saw the number of people who were homeless rise. We saw poverty amongst children rise. These are the sorts of measures that Treasury, as the Minister of Finance has noted, when it develops its report on indicators by 2022, can potentially include as measures of wellbeing.

Kennedy Graham, with the sustainable development indicators bill, had talked about measures like land-use indicators—the amount of land being used for farming, soil health, nitrogen and phosphorus content in the soil, levels of nutrient pollution in our waterways, what our emissions are. What this bill provides, by grounding the whole Budget process on wellbeing indicators, is enabling work that is done to measure the number of people who are homeless, children who are living in families below the poverty line, to measure the state of our environment through the work that Statistics New Zealand and the Ministry for the Environment do in providing environmental reporting, to look at how our economic policy delivers against those indicators. Is our economic and fiscal policy leading to an improvement in the wellbeing of New Zealanders?

The economy is a subset; it’s a tool for promoting human and environmental wellbeing. It is not having people in the service of the economy, as National proposes with its dismissal of this legislation as being “fluffy nonsense”. It shows that National is only concerned with the narrow economic indicators. It is not concerned with people’s wellbeing, which is why this Government has to be re-elected, because we care about New Zealanders, and because that has been the basis, a wellbeing response, to the COVID-19 pandemic, ensuring that this Government’s investment in businesses, the economy, and in nature delivers for all New Zealanders, delivers for our economy, and delivers for people. National would dismiss that. They just want to go back to the numbers and not looking at how the economy serves people and Papatūānuku. The Green Party supports this bill, and I commend it to the House.

Thank you, Mr Speaker. It’s always a pleasure to follow a Green MP. Some of the ridiculous comments that were made—I do have to comment on them, if I may. For a start, the suggestion that National Governments would like to see more oil spills because it creates an increased GDP is just absurd and just makes that member look more ridiculous than she already has been. And to suggest that either side, any side of the House, does not care for the people of New Zealand is again an absurd statement. To suggest that the National Government did not have targets for immunisations for kids; targets for hip operations, for example; concern about the number of jobs in the economy; the unemployment rate; all of these things, including GDP—to suggest that we didn’t care or weren’t concerned for ordinary, everyday New Zealanders is, quite frankly, offensive and just makes that member look stupid.

I’d like to turn to the bill specifically now. There are concerns, and I find it quite ironic that we’re talking about a bill that sets targets, talks about the Living Standards Framework, sets targets in financial, the natural environment, human and social—so that’s the money, as the Minister said—people and community; all those things that make up who we are and what we do in New Zealand. I find it ironic that these targets are being set today and have been set up by this Government, but then they remove a whole bunch of other targets and goals and ambitions that were in place. I’m talking about things like the number of hip replacements—I’m going to say that again—it’s not clear how many are being done and where they are being done; the number of people who are leaving New Zealand because they’re finding a better place to live is not clear, because that target has been removed by this Government. So there’s a bunch of targets that have been removed which would enable us to run this place better and measure ourselves from year to year in a more efficient way.

💬 SPEAKER: Order! [Interruption] Order! The member will resume his seat. I’m going to remind the member of Speaker’s ruling 121/7, which indicates that the member cannot speak at length about what’s not in the bill.

So what is in the bill is these targets, Living Standards Framework. The Minister talked about how this framework can be adapted from Government to Government. We on this side of the House could emphasise one or more of those pillars and subsequent goals and objectives. That’s fine; that’s a good thing. That gives flexibility, doesn’t tie every Government into performing the same, acting in the same way. But then we’ve got Treasury that comes in every four years and reports independently—completely independently, apparently. I have a concern that that’s going to be, I would say, impossible to do, because you can imagine the Government of the day has reported against their own framework—they’re going to report and set themselves goals which they think they can achieve. Some will be very soft targets. You know, what we like on this side of the House is hard targets, hard numbers that we can account to and take responsibility for.

The previous member suggested that we don’t care about the environment. But you will recall, if I may, we on this side talked about water standards and put in minimum water standards, under Nick Smith’s leadership. That is a hard number and it talks about water, and that is a target that I would like to see in the framework that deals with the environment, for example.

So, when we have Treasury coming along every four years, and they’re independent, what emphasis are they supposed to put on that target or that goal or that pillar even? Who’s to say that the environment is more important than the social community connectedness? How is Treasury supposed to say which level is more important than the other? The answer, and the Minister said it, is that they are to do it to their best professional ability—their best professional ability. But, as David Carter alluded to earlier, it’s going to be very difficult for Treasury not to be sucked into the Government of the day or of that period—and it might be two Governments—and to judge those Governments of the day because of the emphasis the Government of the day has put on various pillars. How is Treasury supposed to act completely independently? I didn’t get an answer from the Minister. Should there be surveys every two years, every year? And Treasury surveys the people of New Zealand—should they be surveying Australians, the UK, Canadians? Global wellbeing—how do we fit relative to other countries? Have we declined or improved in our wellbeing?

Well, that’s very difficult to establish when we don’t know what wellbeing means. It’s much easier to compare ourselves internationally, for example, with a GDP—GDP per capita, gross GDP, the unemployment rate, the number of people on benefits of certain types. These numbers are much harder—and easier to measure, obviously—to account for and to take responsibility for. So the problem with this bill is that it’s quite redundant. It’s unnecessary. All Governments on both sides are already, and have always been, concerned with the wellbeing—I talk about the standard of living—of New Zealanders.

You know, the previous Government talked about social investment, and that’s talking about the people who are at the bottom of the pile, the most vulnerable, having a strategy—a five-, 10-, 15-year strategy—to turn the tide for some of these people in our community. That is what we have been doing in the last Government, and I know that is what the current Government is also endeavouring to do and aiming for. So this bill is redundant in that regard.

They are what we are looking for and I’d like to highlight the difficulty that Treasury is going to face when they look from Government to Government over time, because these targets will move. So it’s very difficult to report on a target when it keeps moving. The goalposts will keep changing over time as Governments emphasise different aspects and, in fact, over time, as Treasury staff and the people within Treasury decide what is important in their independent view.

That’s a problem with this bill, in my view, because it doesn’t lock in a number and I could be criticised all day for talking about numbers and being accountable for numbers, but numbers, actually, do matter. Numbers do matter. GDP numbers do matter. That’s not the only number, absolutely. And if you looked at only GDP, it is a very blunt instrument; GDP per capita doesn’t do much better. Unemployment rates are indicative, but they’re not as hard as they could be. But numbers do matter, and we on this side of the House would like to see wellbeing defined in whatever way. It might be environmental numbers: let’s measure the water quality in this place, this place, and this place, and let’s see the improvement in that water quality over time. That’s an example of what should be in this bill and in the Act, and in the regulations that that might follow.

A redundant bill, vague, not hard enough for my liking, has some issues around the conflicts that Treasury will face every four years—that is why I cannot support this bill.

Thank you, Mr Speaker. It’s an absolute shame that the Rt Hon David Carter, who spoke just before, dismissed the wellbeing concept as fluffy nonsense, and we also had the weak arguments that we heard from Alastair Scott, the previous speaker, who just took his seat.

What they may not know is that, back in 2009, the then French President Sarkozy commissioned a report by leading economists like Amartya Sen and like Joseph Stiglitz, whom many of us have a lot of faith in, and who said in their final report that we need to look beyond GDP as a measure of a nation’s progress and that we should put wellbeing at the heart of policy making. That’s now what we’re doing through this bill. What’s new is that our Government is actually doing it. Thank you, Mr Speaker.

Thank you, Mr Speaker, for the opportunity to stand in opposition to this bill. That was a very pathetic contribution by Priyanca Radhakrishnan, the previous speaker, who could not even last for a long time. The wellbeing report that she mentioned from the French Government in 2009—they did not take up that wellbeing concept in France, and so why are we thinking about taking it up in 2020 in New Zealand? So I think we deserve an answer from that speaker or from her party.

I am very pleased that the Rt Hon David Carter gave a very good definition of what wellbeing is. I would like to add to that that the word “well-being”, according to Dictionary.com, was first recorded in 1605, and since then, Governments and rulers have been trying to portray that the wellbeing of the people is very important. Every member in this Parliament comes to this House for the wellbeing of their constituents, and that’s what it means.

I was not part of the Finance and Expenditure Committee when that select committee went through this process, but looking at the report, Treasury is first going to report back in 2022 about the wellbeing measures and on how they are going to use these, and after that, every four years they will be reporting back to the Parliament. The intent of the wellbeing report may be combined with one or more documents that Treasury is required to produce under Part 2 of the bill, and such a statement will be on the long-term fiscal position and the investment statement.

What I want to emphasise over here is this four-year term that Treasury is going to come back and report back to the Parliament on how the wellbeing is going, and as I am part of that study group in Victoria University, it was mentioned that the policies from the Government officials and public servants do change with a change of the Government. So, for four years, there will be no report back on wellbeing, and there be a term of a three-year Government when their performance will not be measured by anyone on any aspect. So that will be a big challenge. For those three years, what that Government did—nobody is going to scrutinise the outcome of the Government. So these are the things which we need to understand.

There should be targets, as we did as a National Government, where public service targets were put in so that every year, we can look into those—[Speaker holds up bill] Yes, Mr Speaker, I am talking—I am comparing the wellbeing—

💬 SPEAKER: Well, get there—get there quickly.

Four years for the report-back period is not a good sign. The Government of a three-year term will not be measured on any account, whereas those public service targets every year came up with what performance was being done by the particular department. So those are the things we need to understand, and that is why this bill is, I think, not appropriate in the way it has been drafted. I think it should be reconsidered and this should not be put into the legislation.

Overall, we also need to understand that it is not only that “well-being” word that will make any difference. We need to have a better economy. We need to have people who have got better jobs so that they can have more money in their pocket, so that they can look after their families in a better way. We need to have better infrastructure where we can provide better economic developments in the long term. A strong economy is fundamental to improving the wellbeing, or the living standards, of New Zealanders, and that is where this whole bill is lagging behind, without any targets set into the whole process.

The Government has systematically weakened our economy since coming into office and adding costs to the Kiwi businesses, and businesses are feeling that pinch. Every time I go out and meet businesses, they always talk about the additional cost.

Lastly, I would like to say that the taxes which have been introduced by this Government in the past three years are really hurting people. We have seen only yesterday that the light rail has been—

Order! The member’s time has expired.

The Government’s vision for a public finance system that supports intergenerational wellbeing for New Zealanders is important, and I’m proud to see this bill in its final reading achieve that by reintroducing the Living Standards Framework and its four capitals: human, financial, natural, and social—important things for humans in New Zealand as well as for our economy. I commend this bill to the House.

It’s a pleasure to make a contribution in the third and final reading of the Public Finance (Wellbeing) Amendment Bill. It’s a really important debate to have today, and at least on this side of the House, we’re having a good debate on that bill. Now, we’re not arguing about whether wellbeing is important or not. In fact, I was at the OECD for three years just after they released the Better Life Index that the Living Standards Framework is based on, and I think we all hailed the introduction of the OECD Better Life Index as a way to acknowledge the shortcomings with gross domestic product and the narrow nature that economic measures provides. But there were also limitations with the OECD Better Life Index: that it was subjective in nature, that what one country or one person places as important, in fact, is different to what another country or another person places as important. That’s why the OECD Better Life Index actually gave individuals the chance to weight the variables in the index so that they measure what’s important to them.

What we’re actually saying is that of course we acknowledge that wellbeing as a holistic measure is important, and that goes way back to the Aristotle days in ancient Greece, who actually debates the importance of not just money or finance but overall wellbeing for an economy. What we’re essentially debating, though, is the role of wellbeing in the Public Finance Act and the role of wellbeing in Treasury’s advice and the work that they do on behalf of the Government. I come from the business world, where, essentially, I’ve helped companies all over, helped them through assessing how they actually achieve their goals that they want to achieve, and what are the measures that they need to put in place in order to achieve that. I think what we’re getting at here in the Public Finance Act is that, while wellbeing is important, there are limitations to assessing wellbeing and the subjective nature of that. So we think, first and foremost, on this side of the House that the core function of the Public Finance Act is to set up a framework to scrutinise Government expenditure, Government assets, and Government liabilities.

I want to raise in the House an important quote from Peter Drucker, a management expert, who says you can’t manage what you can’t measure. Let’s just think of that statement in the House today as we’re about to pass this bill: you can’t manage what you can’t measure. If we want Treasury and all departments associated with Government to manage the Budget and manage the resource allocation that we give them as this House, they must be able to measure that. It’s pretty simple stuff. That is the subjective nature of what we’re getting at here, and we already saw that with the OECD framework. That is why very few countries have actually adopted that framework embedded into their public finance or budgetary nature. Now, it’s great that the Government wants to be first mover on this, but again, there are limitations in actually providing sound recommendations to our civil service as a result.

💬 SPEAKER: Order!

I want to get back to the matters of the bill, which is that we think that what matters is the tangible outcomes—right?—stuff that you can measure. That is what our civil service and our Treasury should be focused on—

💬 SPEAKER: Order! I just remind the member: we don’t have a civil service in New Zealand. They have one in the United Kingdom.

OK, thank you, Mr Speaker.

💬 Rt Hon David Carter: Public Service—Public Service.

OK, Public Service—there we go. Public Service. On the—

💬 Rt Hon David Carter: That’s your school lesson for the day over and done.

Thank you. On those measures, can I say that this Government has made a terrible job of those tangible measures.

💬 Hon Willie Jackson: Government—start again.

Let’s go through them. Child poverty is up. Housing—how many houses have we built, Willie Jackson? How many KiwiBuild?

💬 SPEAKER: Order! Order! I can see the member’s struggling for relevance, but I’m going to remind him to come back to the third reading of this bill.

Thank you, Mr Speaker. What I’m getting at here is that we need to focus right now on the stuff that we can measure. My colleagues have talked about the range of measures that come under wellbeing that are just subjective in nature, and that is why I raise the issue of housing, child poverty, incomes, jobs, the environment. We had the member from the Green Party get up and say that this is airy-fairy. Well, let me talk about a hard-and-fast measure for the environment, which is carbon dioxide emissions. If we want to measure carbon dioxide emissions, they’re going up under this Government, right? So that’s a hard measure right there. Work-life balance—if you want to talk about safety, crime victimisation is up in New Zealand. Workplace deaths are up in New Zealand. Those are the hard measures that we want Treasury and the Public Service of New Zealand to focus on, because those are the things that matter for New Zealanders—those are the things that matter.

Let me bring this back to my own electorate of Northcote. What are the things that matter to the people of Northcote right now? Well, I’ll tell you, Mr Speaker, and I’ll tell this House, that we’ve done a poll, and most recently, I’m happy to tell you, the most important issues in the area of Northcote: the economy, jobs, incomes, transport—

💬 SPEAKER: Order! [Interruption] Order! Second warning—I refer the member to Speaker’s ruling 121/7. It’s a 1962 one from Algie, which means that the member has to refer to the main purpose and contents of the bill. The member may not refer to, at any length, matters not provided for in the bill. I think the member has spent about two-thirds of his speech so far referring to matters that are not in the bill.

Thank you—

💬 Rt Hon David Carter: I raise a point of order, Mr Speaker.

💬 SPEAKER: Well, I hope the member’s not going to dispute my ruling.

💬 Rt Hon David Carter: I’m going to ask for a bit of consistency, Mr Speaker.

💬 SPEAKER: Well, the member will resume his seat now, and I’ll call the member Dan Bidois before the member gets into trouble.

Thank you, Mr Speaker. What the importance is here in this bill is that it empowers Treasury to embed the wellbeing framework into New Zealand, but what the issue is is how not a single member on that side of the House has been able to tell us what wellbeing is. If we want Treasury to be able to assess wellbeing, we’d better be able to articulate it for them. That is the issue: that we’ve talked about wellbeing in some cuddly, airy-fairy concept, but we’re not giving Treasury guidance on what is wellbeing. That is the essence of what we’re discussing today. National opposes this bill at a time like this, when we should be focused on the things that matter to wellbeing right now. We’ve talked about the things that matter: jobs, incomes. So National opposes this bill and does not commend it to the House.

I raise a point of order, Mr Speaker. Look, I just want to draw your attention to some of these Speakers’ rulings in relation to interjections—and we’ve heard a constant barrage of interjections from that side of the House.

Order! Order! The member will resume his seat. The member hasn’t been in the House that long, but that is certainly not a point of order. Anything to do with excessive interjections is a matter for me to deal with and not for him.

I raise a point of order, Mr Speaker. Thank you. I appreciate and accept your ruling, of course. It wasn’t quite the trajectory in which I was going. So I’d like to continue elaborating with what I was proposing to discuss under my point of order, which was in part the interjections, the volume of which is your decision to rule on, of course—and Speaker’s ruling 59/3 makes it clear what the expectation is around that barrage of interjections—but also the fact that the member was enticed by comments made on that side to comment on particular aspects and so engaged in that debate from that perspective.

Order! I’m now going to interrupt the member again and give him a final warning that he is trespassing into an area which is my responsibility. It is for me to call it and not for him, and it is certainly not for him to call it after the event.

I commend this bill to the House.