Wellbeing budgets produced by the sixth Labour government of New Zealand (2017 to 2023) placed the wellbeing of all New Zealanders at the heart of investment decisions. If the government can’t balance the revenue and expenses of Budget Policy towards delivery of wellbeing of the populace then they are breaching the social contract of government. A wellbeing budget provided a means to do this.
The first Wellbeing Budget was predicated by New Zealand’s Living Standards Framework (LSF) established in 2011 during the fifth National Government term. LSF was purposed to analyse and measure intergenerational wellbeing, the impact of Budget Policy on wellbeing of New Zealanders and segment Treasury’s economic advice to guide policy direction. The current of state of wellbeing and defining what wellbeing looks like in the future was to be measured by indicators developed from the OECD plus New Zealand specific indicators.
The four main capitals of the LSF were Natural Capital, Human Capital, Social Capital and Financial/Physical Capital. Gross Domestic Product is New Zealand’s official measure of economic growth. It does not directly measure income distribution, wellbeing, or environmental impact.
In 2008 Nicholas Sarkozy (former President of France), launched the Commission on the Measurement of Economic Performance and Social Progress to address growing concerns internationally on the lack of statistical information about wellbeing in the economy and society. The Commission report (Stiglitz, Fitoussi and Sen) in 2009 recommended a dashboard of indicators measuring economic wellbeing including measuring health, education, environment, employment and social connectedness.
New Zealand made headlines across the world in 2019 by producing the world’s first wellbeing budget designed to tackle mental health, improve child wellbeing, support marginalised populations, enable an environmentally sustainable economy and improve employment1. Approximately $26b was earmarked for wellbeing activities over the following 4 years2. Results were to be measured against the Treasury’s Living Standards Framework.
Public finance and social protection targets included fiscal policy measures that were targeted to assist the poor, promote sustainability of social protection, ensure labour market participation to stabilise the economy and keep protections in place.
In 2019 Jacinda Ardern unveiled this new approach to running New Zealand’s finances at Davos “We need to address the societal wellbeing of our nation, not just the economic well-being.”
New Zealand was acknowledged as having strong material living standards and economic growth, but too many people were being left out or left behind. The 2019 Wellbeing Budget was the beginning of gauging the long-term impact of policy on the quality of people’s lives.
The sixth Labour Government (2018 – 2020) passed the Child Poverty Act 2018 requiring government to measure and report child poverty and have clear targets for reducing child poverty. There was to be a Child Poverty Report Section in every Budget.
The Public Finance Act was later amended, Public Finance (Wellbeing) Amendment Act 2020, to ensure wellbeing was encompassed in future Budgets with fiscal objectives alongside wellbeing objectives to guide budgets and fiscal policy.
The State Sector Act 1988 was reformed to put people at the heart of government services and join public services together with a work programme across all of government to embed wellbeing. A real commitment.
Concurrently the response of the New Zealand Public Service to the coronavirus pandemic was widely recognised as exemplary, receiving accolades both locally and internationally. In many ways, the pandemic revealed the Public Service at its finest – working across departmental silos to meet the needs of New Zealanders in a complex and rapidly changing environment.
The 2020 Public Service Act then replaced the State Sector Act introducing flexible and collaborative approaches to tackling such complex challenges as pandemics, climate change and instability.
Budget 2023 was the fifth Wellbeing Budget and generated Treasury’s first wellbeing report Te Tai Waiora highlighting continuing wellbeing challenges of mental wellbeing, education, housing quality and affordability, and revealing our natural environment deteriorating due to intensive resource use and changing environment.
The first Child Poverty report in Budget 2019 ran from P20-29 inclusive, the Child Poverty Report in the fifth wellbeing Budget 2023 from P45-57 inclusive.
Compare this to Budget 2024, a separate 4-page Child Poverty booklet reporting that the last financial year’s high inflation and cost of living impact raised child poverty levels and introduced the goal of reducing benefit dependency. The word wellbeing was never mentioned. In fact, the word ‘Wellbeing’ had been erased from all Government communications.
The current government took no position on wellbeing having eradicated wellbeing from its Budgets to meet the Coalition agreement. Act and National Party Coalition Agreement Monetary Policy • Narrow the Reserve Bank’s remit, to focus on price stability, and take advice on replacing “medium term” with specific time targets. • Amend the Reserve Bank of New Zealand Act 2021 to remove the dual mandate and take advice on removing the Treasury observer and returning to a single decision maker model.
The wellbeing related requirements were finally removed when the Public Finance Amendment Bill Government Bill came into force on 1 July 2026, intended to improve the clarity and effectiveness of section 26M (Budget Policy Statement), retaining broad strategic priorities without unduly restricting how the Government articulates their responsibilities.
17Section 26KB repealed (Contents of fiscal strategy report: wellbeing objectives) Repeal section 26KB.
The fruits of the incumbent government direction to achieve fiscal sustainability without wellbeing is demonstrated by homelessness reaching highest levels in history of Aotearoa. Going hand-in-hand with higher inflation, unemployment and lower productivity.
There is plenty of economic support for the pay-back to the economy of investment in infrastructure, climate change and resilience, health, housing, future of work, gender lens, reducing family and gender violence, reducing poverty including tackling child poverty.
There has been extensive discussion in well-informed economic forums regarding the robustness of the wellbeing measures. Wellbeing fosters growth that provides decent opportunities for all, provides training opportunities, inclusion for the disabled, enabling incomes for all – respecting the unemployed, the beneficiary and those who are unwaged, building resilience, respecting and improving our natural environment, achieving a carbon neutral, low emissions self-reliant economy raising wellbeing and living standards. And in turn increases capability and business and intergenerational wellbeing that will benefit all New Zealanders.
Gail E. Duncan 1 September 2026
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