Grant Robertson
Auckland, July 29, 2019
(Posted on July 30, 2019)
Good Governance matters in our lives- whether it be in central government, local government, business or indeed on the Cricket pitch.
We need to be confident in the rules of the game- that we will be treated fairly, consistently, safe in the knowledge that if we do our best, try our hardest there will be rewards.
Success in failure
You can see I am still not over the Cricket World Cup Final. And I don’t think I ever will be. I know that the Black Caps did not lose that game, it is just, somehow they did not win it.
Yet, in so many ways they succeeded. They succeeded in winning the hearts of Cricket fans the world over. I had the privilege of being at Lords for the game.
After I had gotten over the awkwardness of sitting with Australian Cricketing great Steve Waugh, I settled in to watch the game, and ended up sitting next to an Indian entrepreneur, who is based in London.
He is the biggest Black Caps fan in the world. He told me that he even found himself supporting our team at times when they played India (though not in the semi-final!).
He loved the way New Zealand plays Cricket, not just as the perennial underdog, but the spirit of our play- the courage, the attitude and the integrity.
It was a joy to watch the game with someone so passionate to support our team. But the beauty of Cricket brought us together, business cards were swapped, and potential opportunities for further cooperation created.
That too is a success.
Government matters
I will return to the definition of success soon, but I want to spend a little more time on why good governance matters in an area I have a bit more knowledge of, and that is in government. For better of for worse government matters in all our lives.
It affects everything we do, and not just because we set the rules of the game.
Because government is so much more than laws and regulations. Government decides the priorities for spending the hard-earned tax dollars, what is spent on Education, Health, Housing, Roads and Rail, Defence and the Police.
They are decisions that will help shape our lives for generations to come, so good governance matters. But good governance is about more than managing money carefully and investing wisely. Good governance is also about how we govern.
Scepticism and Unhealthy Tension
I suspect there has always been a scepticism about politicians and politics, which is understandable, and even in a sense a healthy tension.
But even in my lifetime I think I have seen it grow. To my mind it has now grown to a point of being unhealthy. I believe that for most people they see politics as something that is done to them, not something that they are a part of.
The journey from scepticism to distrust and ultimately disengagement can be short, and profoundly dangerous to our democracy. Around the world we are seeing that disengagement play out in various ways.
At its most extreme, it can lead to violence, chaos and disorder. It can also drive populism and the politics of division. If a people look to government and simply cannot believe what they are told, or do not see themselves reflected back, they will disengage.
If a population is told time and again that they have benefited from globalisation, but all they see is unemployment and stagnant wages, they will become cynical. And in such a state they become easy victims of those who spread fake news, tell comforting half-truths and provide easy answers.
This feeds intolerance, racism and exclusion. In other words against all the things that underpin the values of a country like New Zealand. So good governance matters because it is to my mind the critical way to fight the rising tide of populism and government by division and exclusion.
Core Principles of Governance
The themes that Venkat has set for this Lecture – Honesty, Integrity, Transparency and Accountability are the bedrock of getting good governance right.
And the good news for New Zealand, whichever party is leading our government is that we succeed in many ways in providing good governance, but we must never be complacent, and there is room for improvement.
The good news first, then. The laws and institutions that underpin our government are strong. New Zealand is almost always in the top three of Transparency International’s anti- corruption index.
The World Bank consistently finds us as the best place in the world to do business and the easiest place in the world to start a business.
We do have a strong rule of law- our court system does not have corruption scandals, bribery of public officials is unheard of and trust in government institutions generally is high, and on the improve.
Exclusive Practice
Last week I spoke at a Conference for the 30th anniversary of our Public Finance Act.
While the Act has limitations and gaps which I am working to address at its fundamental are critical principles, in particular on transparency and accountability.
Every month we produce accounts for the government, every six months we do a full assessment of the what and the how of our spending, every year the Parliament debates every line of expenditure. This does not happen everywhere in the world, and we are fortunate that it is embedded into our law. And the careful fiscal management that is also embedded into the law has served us well through a succession of government as we faced the Global Financial Crisis (GFC) and natural disasters.
Even so, as I said earlier I have detected in the twenty years or more that I have been in and around politics a growing sense of public alienation from government.
Not on the scale seen internationally, but something that if left unaddressed has the potential not just to be bad in terms of policy outcomes but for our whole democratic process.
I actually believe this fed into the result of the 2017 election.
New Zealand had a rate of GDP growth of around 3.5% going into that election.
The ‘Rockstar Economy’ misnomer
You might recall we were being called a ‘Rockstar Economy’ by some.
Yet, New Zealanders, or at least a fair majority of them, scoffed at that label.
How could we be declaring success when homelessness and child poverty were rising, where our lakes and our rivers were getting more and more polluted, where our rates of suicide and mental distress were increasing, where the gap between the wealthy and the rest was growing ever faster.
The Wellbeing Approach
We felt, it was time for a different way of not just measuring success but of deciding how and what we invested in, and so the Wellbeing Approach was created.
Two caveats about Wellbeing to stop Paul (Goldsmith, National Party Finance Spokesperson) from hyperventilating.
First, all governments in New Zealand will say that they have the wellbeing of people as their focus. The difference in what we are doing is that it is now part of every stage of our Budget process. From using evidence of Wellbeing in setting our Budget priorities, to subjecting each Budget proposal to a Wellbeing analysis, to measuring our success against a set of Wellbeing indicators.
The second caveat is to note that taking such an approach does not mean leaving out the financial and fiscal health of our nation.
Generating wealth and prosperity is a critical element of our current and future wellbeing.
It is simply that on its own it is not enough.
Mahatma Gandhi said that happiness is when what you think, what you say and what you do are in harmony. That is what we are trying to achieve with the wellbeing approach. To create better governance so that people can relate to, and see themselves in our Budgets and the way we govern.
Living Standards Framework
The important first step for us in this approach has being the Wellbeing Budget.
This is based around a piece of work undertaken by the New Zealand Treasury called the ‘Living Standards Framework.’
This is based around the four capitals, or stocks of wellbeing, Financial/Physical, Human, Natural and Social. Or, to put it into non economist speak- our money, our people, our environment and our communities.
Getting them in balance and harmony, strengthening them all now and into the future is the essence of wellbeing. And to back that up the framework has around 60 measures of wellbeing. These range from the traditional such as levels of income, employment and home ownership, to the more subjective such as life satisfaction, connection to community and culture.
Five Priorities
We used this Framework, along with expert advice from inside and outside of government to decide on our five Budget priorities- Mental Health, Child Wellbeing, Addressing Disparities for Maori and Pacific peoples, Building a more productive nation and a Sustainable economy, in particular meeting the challenges and taking the opportunities related to climate change.
And at each stage of the Budget process we focused on two important elements- how to break down the silos of government and what would have the biggest impact on future generations.
If there is one thing that will erode trust in government, it is the inability of government to work together.
Individuals do not wake up in the morning and think about each of the government departments they need to deal with, yet that is how we have been structured and organised. Examples- Mental Health and Domestic Violence.
Different measure
And we are now measuring ourselves differently.
In the Budget, we have a Wellbeing Outlook.
In it, you will still find all the core statistics about the economy- debt, which is under control, a surplus, which is strong and growing, government spending which is around the long run average, unemployment, which is at historic lows, but also how we are doing in terms of mental health, child wellbeing, the quality of our water and our air.
And you will be able to see every year the progress- or not- that we are making.
To my mind, this is a significant step forward.
We are valuing and reporting on all of the things that make for success.
In many ways, we are catching up to businesses here.
In your annual reports, you have the why and the what of your business at the front and the accounts at the back.
For a long time government has only really focused on the accounts. Now we are giving you the full picture.
There is more to do with this approach.
To take it beyond just the Budget to all that the government does.
We need to ensure the framework, the rules of the game if you like, reflect our values and the unique multicultural make up of our country.
This is our first go at this, and there are things to improve, but I truly feel we are heading in the right direction.
Again as Gandhi says “You may never know what results come of your actions, but if you do nothing, there will be no results. We are trying something different, because the option is to be complacent and allow the cynicism to turn to distrust.”
I fundamentally believe in the power of people to transform their lives.
A government does not dictate a person’s wellbeing, but if we truly believe in people and their capabilities and put wellbeing at the core of what we do, then we will give every New Zealander the chance to succeed. That to me, is good government and good governance.
Grant Robertson is Finance Minister of New Zealand. The above was the Speech that he delivered at the Ninth Annual Indian Newslink Lecture held on Monday, July 29, 2019 at Pullman Hotel. Auckland Mayor Phil Goff was the Master of Ceremonies, National Party Finance Spokesperson Paul Goldsmith presented his ‘Reflections’ on the Speech, while former Member of Parliament Dr Rajen Prasad provided the Concluding Remarks. Earlier, Labour MP Priyanca Radhakrishnan delivered the Welcome Address. Please read related stories being posted.
(Pictures by Narendra Bedekar, Creative Fotographics)
