New Zealand and the Wellbeing Budget

New Zealand is considered to be a developed country. The country has rich natural resources and a very scarce population. As a result, the per capita income of their citizens is quite high. The country has been growing at a healthy rate of 3% per annum. Also, it has a healthy GDP, which makes New Zealand wealthy by traditional standards. However, now New Zealand had decided it to take it a step forward. For the first time in economic history, New Zealand is set to launch what it is calling a “well-being budget.”

This means that New Zealand does not want to be a country where only economic goals are being met, whereas humanitarian goals are being neglected. The Kiwis now want to provide the best quality of life to their citizens. As a result, new parameters for success are being included. New Zealand now plans to measure the mental well-being of its citizens. It also plans to measure other parameters, such as child poverty, innovation, and carbon emissions.

Many other countries have spoken about the need to give importance to such parameters. However, none have made it their central focus. New Zealand has essentially made a commitment that every dollar it spends will add to the well-being of its population. This is the reason why New Zealand’s move is commendable and a milestone for national policymaking.

How is the Well Being Budget Different?

New Zealand has been facing a lot of mental health issues as a country. About 5% of the GDP of the country is spent on curing mental illnesses. Obviously, this means that the cost of human misery that the citizens of New Zealand face is incalculable. Up until now, the New Zealand government has only been helping citizens who have very serious mental health or addiction issues. However, that has not solved the problem. Under the well-being budget, the New Zealand government plans to take a very aggressive approach and open first line well-being centres to provide counselling and mental health services to its citizens across the nation. This is expected to cost New Zealand a massive $1.5 billion per annum. Alongside, New Zealand is also going to spend another $700 million to combat the problem of child poverty.

Also, there are some ethnic minorities in New Zealand who have larger than average mental health issues and as such are also found in large numbers in the country’s jails. New Zealand government plans to allocate more funds to regions where these ethnic groups are found in large majorities. The idea is to use the mental health expense as an investment to create productive, law-abiding citizens who will pay more taxes, which will help to recoup this massive expense on mental health.

Unemployment and the Well Being Budget

The well-being budget is only facing criticism because it has not focused on unemployment. The unemployment rates in New Zealand have been unacceptably high in the recent past as compared to the historical average. Historically, the unemployment rate hovers around 2%. However, of late, it has more than doubled to reach 5%!

Ideally, this should have been a priority issue for the New Zealand government. However, surprisingly, it has not been considered in the budget. Many critics are of the opinion that other problems such as child poverty and mental health issues are offshoots of unemployment, which is the real problem. Alcoholism and other addictions are highly correlated to unemployment. Hence, instead of solving the symptoms, New Zealand could have solved the problem from the root, had it focused on unemployment.

Income Inequality and Well Being

According to critics, New Zealand has ignored another major economic issue. Just like unemployment, income equality is also at the root of many ailments which New Zealand currently faces. Beyond a certain level, there is very little correlation between the GDP growth and economic well-being of the nation. This is precisely what seems to be happening in New Zealand. Even though the country is experiencing GDP growth, it seems like the top class is the beneficiary of most of the economic gains. This is the reason why economic inequality seems to be getting exacerbated despite the economic growth being in positive territory. New Zealand’s economic well-being budget does not seem to prioritize the resolution of income inequality issues.

Despite the criticism, the actions undertaken by the New Zealand government are commendable, to say the least. This is because it proves that rich countries like New Zealand do not need any additional GDP growth to solve their problems. Instead, they simply need to reprioritize their spending patterns to drastically increase the mental and emotional well-being of their people. The population of New Zealand is happy about the fact that their government is starting to look at things their way. Their underlying belief is that the economy must serve the population and that it must not be the other way around. They are hopeful of the fact that this is only a first step and that there are many more to follow.

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