Case Study

Once budget proposals were submitted to the Treasury, a team of analysts with a diverse set of expertise  assessed the proposals in terms of wellbeing value for money, seeking further expert advice where needed. This then fed into the decision-making phase of the budget where Budget Ministers and Cabinet form and agree the budget package. In the 2022 Wellbeing Budget, value for money was broken down into three components:

• Value, that is, the proposal’s impact on societal wellbeing outcomes, supported by evidence. This component draws on the Living Standards Framework and He Ara Waiora to enable analysis of impacts and outcomes from different cultural perspectives and knowledge systems. Initiatives need to identify distributional impacts for Māori, Pacific peoples and children and demonstrate a robust intervention logic.

• Alignment with agency strategies, the Government’s wellbeing objectives, and relevant cross-government strategies. This includes alignment with New Zealand’s Child and Youth Wellbeing Strategy.

• Deliverability of the initiative, based on core information such as well-defined outputs, costings, assurance of effective delivery, and monitoring and evaluation.

The Treasury assessment focused on both the individual proposal level (“How does this initiative contribute to wellbeing?”) as well as what the overall budget package means for societal wellbeing, to inform ministerial decision making. This aggregate analysis is important to help Ministers identify possible gaps, for example, where a proposed budget package is not doing enough for a certain wellbeing priority or vulnerable group in society. As Ministers tend to have hundreds of initiatives to consider as part of the budget process, the Treasury used colour coding (in red, amber, green) to highlight their assessment of initiatives across the three dimensions of value, alignment and delivery.

Those policy proposals that were considered by Budget Ministers and Cabinet to best meet the three criteria of wellbeing value, alignment and deliverability were selected, upon which the final budget was released. Once the Budget Package was agreed, the Treasury published the final Budget, which included an update on wellbeing in Aotearoa New Zealand, outlined the budget allocations, and described how these allocations would work to improve the wellbeing priorities. Finally, a feedback loop through to the next budget completed the budget cycle, by monitoring wellbeing outcomes and evaluating the impact of specific interventions, to help inform investment decisions in future budgets in terms of ‘what works’.

Following a change in government in October 2023, the New Zealand budget process has shifted back to prioritise traditional economic indicators like GDP. It is not fully clear yet how much of the Wellbeing Budget process will be retained. Nonetheless, the broader principles that the Wellbeing Budget approach introduced are likely to remain influential in public policy debates in New Zealand going forward.