Finance Minister Grant Robertson says Labour & Greens working on new sustainable development indicators ahead of first 'Wellbeing Budget' next year

Grant Robertson by Jacky Carpenter.

Finance Minister Grant Robertson says next year's Budget will be New Zealand's first ever "Wellbeing Budget" as the Government moves beyond simple measures of economic success such as GDP as it strives for increased productivity.

In a speech entitled The Future of Work: Adaptability, Resilience, and Inclusion to The Productivity Hub in Wellington, Robertson said the Labour Party is working with Confidence and Supply partner, the Green Party, on new sustainable development indicators. These, he says, will "paint a fuller picture" of how well off people are and how the Government can focus its resources best.

"I have also instructed the Treasury to accelerate their work on the Living Standards Framework, which measures the impact of policies on four capitals: Human, Social, Natural, and Financial/Physical. I intend to use this framework to inform the Budget process for Budget 2019, making it our first ever Wellbeing Budget," Robertson says.

"By placing wellbeing at the heart of what we do, we will be able to measure the extent to which our policies and investments are making real improvements to peoples’ lives."

Additionally, he says, improving productivity is key to improving wellbeing.

"By producing more from every hour worked, businesses become more profitable, incomes rise, and workers’ wellbeing rises as time is freed up and purchasing power rises. The challenge is, how we achieve this?"

"If we look at Germany as an example, union members often sit on company boards as part of the decision-making process, ensuring that employee wellbeing is considered alongside high-level corporate profit and financial targets. It is unsurprising then that German workers on average worked the fewest hours annually in 2016 of all OECD countries, with New Zealand workers on average doing 400 more hours every year," Robertson says.

"This is possible because Germany’s workers are also some of the most productive in the world. I want to see New Zealand reach a point where we are able to work 400 fewer hours a year while producing more than we do today. For us to get there we need to make the advances in productivity we have been discussing today. Technological improvements will play a huge role in this."

The Government's focus on improving wellbeing requires a different approach and different measures of success, adds Robertson.

"We want to take a broader view of success and move beyond simple measures such as GDP, which, while an important measure of economic output, does not tell the full story of peoples’ wellbeing."

"I want us to re-write our productivity story, so that New Zealand becomes a leading example of a sustainable and productive economy in which everyone gets a share of economic success."

"We have a long way to go, but this Government is committed to tackling the long-term challenges that this country has faced for many years," Robertson says.

His full speech is here. 

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58 Comments

Jeez if it works I'd be working ten weeks less per year!!!hope robbo can let me know how to make ten weeks of short cuts and still have clients at the end of the year!!!

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And this from someone who is our Finance Minister................. this has to be the most stupid statement any politician has made this year

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Nice in theory

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Oh for goodness sake ............ how on earth will working 10 weeks less a year help a bus driver run his schedule ( or his employer ) or a chef , just as 2 examples ?

Roberston should think before opening his mouth

Well I don't think you can achieve efficiency just by working less.
But lets say the bus company implements an automated ticketing system and the bus driver now spends 20% less time to do his route as he is not taking cash payments, all of a sudden that same bus driver is producing as much in 32 hours per week as he did in 40 hours.
Or lets say the chef gets a new oven that cooks 20% faster than his old one.

Or you have 2 bus drivers, 2 chefs working split shifts?

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And he should be well aware ................ WE ARE NOT GERMANS and with all the will in the world we will never be ( thankfully )

Nor are we Chinese , Japanese , Korean , or Swiss .We are fundamentally British with a British workers' attitude to work , we love Trade Unions and like doing as little as possible for the most amount of money we can squeeze from employers

He is being disingenuous citing Germans as a comparison with us , and should visit Germany to see how hard those fanatics really work.

Well said Boatman we are Kiwi's not robotic Germans we are a lazy bunch it's called the Kiwi lifestyle !

Boatman,

And just how many German factories have you visited to give some credence to your claim?

The average German clocks less hours of work than their Kiwi counterpart; the country as a whole bodes better than us on several performance metrics, such as, standard of living (HDI), GDP per capita and most importantly, income inequality.

400 an hours a year is a bizarre way to sell it. Its effectively the same as saying moving from a 40 hour work week to a 32 hour week. About an hour and a half less per work day. With increasing automation it may become a necessity for unskilled positions anyway.

Could go two ways in future with automation and finance.

1. Automation supplements humans, humans work fewer hours and do other stuff instead.

2. Automation increases returns to shareholders, companies demand people work lots of hours but for less. Effectively continuing the current squeezing we're seeing going on in the USA.

companies demand people work lots of hours but for less
this happens already all over the place, ask around and find out how many people on salary work extra hours for no extra pay.
i know plenty of workers working from 5.30am to 7.30pm + come in on weekends on forty hour salary and they do it out of fear of losing the job.
do they like the job, no they hate it now but fear is a powerful motivator and the boss is a JK type all friendly to your face but every mistake demands middle management to enforce discipline, and he has moved on two ops managers in a year because they stood up for the workers

What industry out of curiosity?

freight, which is mostly staffed by imported workers now, most are international companies,
i know one that uses interns so does not pay them as they are funded by the university that sends them over for a 6 month placement. they are supposed to move around the company doing a variety of roles so they can use it for there final paper but instead they are put where there is a hole and left there and you would be surprised at the country and company that is doing this (its not Asian)
one was put on reception and did not have very good English, so we used to get many WTF comments, started out a joke but after a few months was not.
i have worked for quite a few and know many of the people at others so most are same same all over just different names.
all comes back to bad management in the industry

Another staph infection that has been growing in the US market, the exploitation of internships to get free labour, rather than as a learning op.

Vote Labour/Greens

Unions give workers a voice. Germany has strong unions, and much fewer hours of work.

It's a no brainer. Unless you are wealthy enough to not have to work you should be in the booth checking the Labour box every three years.

FYI, I've corrected the introduction to this article to "next" year's Budget, not this year's Budget.

This would not have helped Fletcher building probably made things much worse. Gov't is increasing the public's expectations so it will be a just a matter of time before it does happen.

They are absolute classics.
The coalition has announced nothing to increase productivity and make business more profitable,so the country can thrive.
Then out of the blue he wants people to work 400 hours less than they currently are so that will definitely help the employer as he won’t need to pay as much, won’t he?????
Slippery slope coming up!

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How would a professional landlord possibly work 400hrs less a year. By my calculations, that would equal a negative number of hours.

You are correct IO!
I don’t really call it work, more just management of the property although it is a family affair moreso nowadays!

No one would employ me nowadays anyway and far more in rental property investing anyway in Chch

Working for wages is so overrated anyway.

Not all beer and skittles being a professional landlord, however wouldn’t swap,it for working for wages.

Professional full time landlords don’t get the accolades that they should be getting.

They do a far better job than what Housing NZ does, however the standard of our tenants are so superior to what they work with!

Have a look at the standard of upkeep on the outside of Housing NZ houses, we just don’t put up with that crap!

The skys falling again the MAN?.I know you are true blue but seems all is well so far?

The government expects the younger generation to succumb to the lure of free tertiary education and gain skills in areas of skill shortages, thus increasing productivity. But we all know the teens of NZ would all enroll themselves in psychology and political science courses to bring us back to where it all began.

“Well being budget”?!!!!

What a load of crap. I’m totally speechless.

If you are living in a 1 bedroom 50 sq/m apartment imagine your "wellbeing" after 10 weeks of spare time - no lawns to mow, no gardens to tend and you have no walking-around money left

OMG !! ....What a load of rubbish ....
this circus has gone from entertaining to ridiculously funny ....

Not quite sure if GR really believes what he just said or he thinks that the sheeples are so naive to believe such BS ? ... maybe he needs to double check on advice he is getting !!

Those of us who have worked in whatever business, Industry, trade, or corporate for 30+ years know that apart from the mentioned cultural differences and motivations - what GR is dreaming of just does not fit NZ ... This is a free lunch, dinner and drinks !

Boatman is right .. we are what we are and raised to be ( from primary schools) ...in short, most of us are lazy and programmed to do as little as possible and brag about it !! .. we are spoiled and untouchable and we only look after #1 ... So the word productivity does not fit in most of our programing !! .... milking an extra gram of productivity from most would lead to a personal grievance case at the DOL ...Stress!!

One can not but think that this is a PR exercise aimed to achieve any or all of the following:
- Unions to sit on boards and make decisions,
- Greenies to have more hugging Trees time while paid full time ...
- Businesses to share their profit with workers ( paying more for less output)...
- An umbrella to force wage increases by decreasing working hours ( for humanitarian reasons of course !! )
- Or an introduction to increasing taxes to meet these additional human, social and environmental obligations ! - another project to be designed by the tax group!!

We are heading South people ... this smells like a serious socialist experimentation going mad ... and a race to the bottom !! Not sure if this is WP's Human Face of Capitalism.

lol, the budget of Wellbeing !! .... hilarious really

Why is the standard 40 hours a week, not 35 or 45 or 80? This is a pretty arbitrary number. Sure working less hours in some jobs won't be feasible, in others it would. The reality is that more and more jobs are going to be automated away. This doesn't lower what we as a nation produce, in fact it will almost certainly increase it. If we are producing more then as a nation we are wealthier. . . and we collectively have more free time. Where we run into trouble is that people bemoaning the fact that others are getting stuff for "free". But if we get to a point where all the menial and low skilled tasks are then what do low skilled workers do for work? Dig holes and then fill them back in so that they can say they have earned their way? This seems ludicrous. At some point can't we stop making more money and "stuff" and have more time?

You scoff at this but I think it is exactly the type of direction we need to be heading in. It could be the first stop on the path towards implementing a universal basic income which would be awesome. We need to work smarter not harder.

I am all for UBI ... as per the models being tried in europe and elsewhere for the last few years ... But, Just come out and say it if that was what it is about minister.... Do not muck around and plug the speech with words like productivity and resilience and sustainability .... !! the idea sounds noble, the sale's pitch was cheap and silly and wouldn't fool a 3 year old !..... and I suspect that intentions are not what they seem to be ....

UBI is a big step and involves huge changes in corp and business taxes and employment laws ... it requires everyone to jump "gradually" on board and could be very real in the next 5 years.

I did not read a word on that in an important speech like this - meaning that GR is not preparing NZ for the coming tech revolution in the next 5 -10 years at all... and the Gov thinking is still focused on the same old with tweaks for the next 20 years ...

For those who are interested in what the future would bring, here is a link to a fascinating talk by Jim Carroll gave at the World Government Summit 2 days ago -- the video is long but you can FF to 9:35:00 to see Jims talk:

https://www.youtube.com/watch?v=BKtdg6BolKo&ab_channel=WorldGovernmentSu...

there was a lot of talk about UBI during Davos 2017 and elsewhere ...
https://www.youtube.com/watch?v=7rL6gJkdlNU&t=5s&ab_channel=WorldEconomi...

https://www.youtube.com/watch?v=UDF8o9e1QVc&ab_channel=StuartPlatt

I think you can be sure that in the back of GRs mind is the need to bring up the subject of a UBI. Not enough people understand yet why it is necessary and what will be required to provide it. The world is not ready for it yet, but we are definitely on the path to needing to address it. The National party would not even allow anyone to think that they would consider it.
Even of those of us who see it necessary in the future, know it is going to be far more difficult than just flicking a switch.

It wasn't that long ago that we had laws restricting the working week to 40 hours. I believe it was in the interests of safety, well being and family. It seems that 10-12 hour days are now the norm again for many workers.

Didn't a well known economist once predict that we would eventually spend less time working and more time pursuing other interests?

One could argue that a UBI has existed since the dawn of time. It came in the form of nature and provided free water, food and shelter. Everything to fulfill human's biological needs.

Unfortunately, humans created a mess and now lack the wisdom required to solve it.

This is where economics is a failure. It fails to account for human egos, emotions and psychological needs.

German companies are fundamentally different in their culture and the way they are run (see 'works councils', 'co-determination', 'management by consent' etc.) and also the German government offers tax incentives (e.g. accelerated depreciation) so CapEx per employee is high and that tends to drive efficiency. That said it's good to see the government starting to think about productivity measures as this has been a substantial weakness in New Zealands economy. I'll give the government the benefit of the doubt, perhaps they will find a way to incentivise CapEx.

Maybe this guy works 32 hour weeks and thinks it’s so great he’d like more people to have the same privilege.

I note that it is the Eco Bird types that obviously have plenty of time to post their narrow minded propaganda on this site that are those most against Labour and its ideas. Too many New Zealanders are very time constrained due to serf like work pressures and stupidly high housing costs. In a world where many jobs are threatened by automation and computerisation, being able to work less hours for equal pay will permit society to create more jobs in recreational pursuits; especially as housing costs reduce, which they must. One benefit is an ability to get more exercise which will reduce health costs. It is ironic that in the cycling fraternity, retirees are often fitter and healthier than their over worked offspring.

It’s fun to see all the usual dinosaurs come out and roar against change again.

Rusted-on Nat position seems to be that improvements in productivity and efficiency are some kind of commie plot, and that they're too lazy to bother. Daft.

No, the Nat position is that just because something seems to be a good idea, it doesn't necessarily follow that the Government is best placed to do it, or that the best way of making it happen is for the Government to mandate it.

Remember, companies are there to maximise profits. Why would they need to be forced by Government mandate to take action that will increase their profitability?

Personally, while I don't trust the guy or the Party, I can't fault the idea. Increased productivity is usually a good thing. Presumably they will choose those bits of the German success story that they like and can see, not the hidden forces that drive it. I expect them to choose the Fashionable Ideas, not the Hidden Agenda.

Germany is a very messed up country with a lot of unsolvable problems that have been developing slowing over many years. We are well behind them in that we are still at a much earlier stage in the development of those problems, so they are still solvable. It is just as dangerous a role model to cherry pick from as the hopeless, pathetic Brits.

To me the reason for Germany's success is that it has a cultural respect for Productive Capital. That includes great respect for the owners of productive businesses. This is the key to their productivity. The chances that the new government will be able to see that seem small, but you never know, stranger things have happened. The fact they are looking to Germany for ideas is a good thing, rather than looking to the US, where Financial Capital is worshipped.

The funny thing is that the well being of the workers goes hand in hand with the well being of the owners of the business. When they work together they can achieve great things; when they fight they destroy each other. Maybe the new government will do some good things that actually do work out, either intentionally or otherwise.

The area I think we should look at is Germany's deep understanding of money and how to use it productively. The great Hjalmar Schacht stands head and shoulders above all others, and his legacy has endured. The Americans got sidetracked by putting the interests of Financial Capital before that of Productive Capital and so their manufacturing has been steadily exported over the last 100 years. The American academics think about all the wrong things and teach nonsense, Germany trains people to be good at their jobs.

To me the reason for Germany's success is that it has a cultural respect for Productive Capital.

Our big problem being too many Kiwis are in love with a structure that favours unproductive capital but pushes house prices up, and don't want this to change to one that encourages investment in productive business instead.

When the Country has sorted out all the problems, then it is time to sit back and relax.

I have offered to automate Parly-iament and The Public Servants as efficiency is needed. All talk, no action.

I have offered to Automate and reduce their over stuffed pockets, so they do not have a silver lining. It was never meant to be that way.

But as it is easy to point fingers I will get my robots to point out the obvious..and .build 500,000 houses to allow the humans room to move and sleep and not make any more money as we have printed and imported enuff, of em.

Infrastructure and transport should be automated too, cannot have enuff of that. ..No point in inventing a 250km per hour robot built car to leave on a 35km car park in Awkland...daily.

Go Robots...

Why doesn’t everyone just go on benefits?
Why do we need people working?
We could just borrow trillions of dollars and that will pay for the free education, no that would be a waste of money as why would we need educated people as we will just get the handouts so we can all live!
GR is going to be brilliant plotting the finances of NZ rather than increase productivity and turnover let’s reduce everyone’s workload and expect employers to pay just as much for doing less.
BRILLIANT!!!!!

Why doesnt everyone just become a property investor? Why do we need people working? We vould just borrow trillions of dollars and that will pay for free accomodation, no that would be a waste of money as why would people need to rent if everyone owned multiple properties!

Another big dream from the hopes and dreams party!

The sense of this is great. We do need to be far more productive and need to get back to the point where a worker can support their family decently without working 60 or 70 hours per week. Further, if we are to embrace automation the natural consequence must be a need to work less hours and also not flood our country with immigrants to perpetuate a low wage low productivity economy. However, it is all great as a long term objective, but I think that we are all going to have to work very hard to overcome the mess that National has left. We are going to have to pay for all the new houses, schools, hospitals and infrastructure deficits that Nationals ponzie economy has left us with.

Not sure Germans individually are substantially more productive than we are, they are fortunate that when they buy a machine they can use it 24 hours a day thereby tripling the output of the machine over any period and then replacing it that much sooner than we can with a more modern and efficient machine. They have large industries and employ thousands on a work site to get efficiencies and a huge market is on their doorstep. They also have the advantage of an artificially low exchange rate, caused by the Euro participants who effectively keep the Euro low, bit like if we had currency union with Australia, our dollar would effectively rise and theirs fall making them more productive overnight and us less. A plumber in Germany is no more productive than one in NZ on a job, the difference is that they may not need to travel as far to each job and so may get an extra job in each day. Environment has a huge impact on productivity that may be outside the control of the individual.

A simple fix to improve GDP / Capita - a common measure of productivity is to lower the exchange rate from it's historically high levels that have been detrimental to export returns in recent years.

Exports add to GDP - Imports subtract.

Price changes will modify these figures over time.

A lower exchange rate will therefore improve productivity per capita.

So employers are going to pay more wages to have people works less hours, and take the risk on them increasing their productivity....tui right there. I am betting this will simply drive greater adoption of automaton and robotics as that is a far less risky strategy for employers.

Lets get to the crux of it. Crash the stupid housing and rental market and the number one cause disturbing equilibrium will be corrected. If the debt ponzi (speculators and banks) take a hit, they are by far the minority vs mass robotic and automation driven unemployment.

On the subject of productivity, Perpetual Guardian is moving to a four day working week to try and improve productivity - https://www.radionz.co.nz/national/programmes/checkpoint/audio/2018631227/it-s-about-being-paid-for-five-days-but-working-four

And that is absolutely fine, if an individual employer thinks that something like this will improve productivity then they are free to do it; and indeed they should if they want to remain profitable and please their shareholders. If they are successful then other employers will follow.

However, that is a million miles from saying that the Government should require all employers to do the same. A Government that wants to do this should first explain both why it thinks that it is more knowledgeable than are businesses themselves about how to improve their productivity, and also that it has a stronger motivation than businesses to do so.

My company employ's 28 people, we are the only company in our industry to run shifts of 4 days on 4 days off. At 11 - 11.5 hours per day this equates to approx 70 more days off a year with a sightly higher income. Some people do 10 hours a day or less, I'm flexible to their needs. We also do traditional 5 days a week 40 hours and offer both these options in our recruitment ads. We still get next to no applicants. Are we more productive with these shift cycles? We have found it comes down to the same old fundamentals, well trained people with a strong work ethic happy to work in a team culture are the best staff regardless if they are doing 30 or 60 hours a week. Govts and other organisations have criminalized work in the minds of younger generations in recent decades. The benefits and rewards of a busy productive fulfilling work life need to be conveyed and encouraged.
Most kiwi's used to be proud competitive productive workers, I see more often than not now kiwis whom are proud of being "laid back", or it's "not cool" to put ones self out there and be engaged or responsible at work. This wellness BS isn't going to help this mindset.

You know when I first read this headline , I instinctively looked up at my calendar to check it was not 1 April and some April fools prank.

Productivity is something that those in the Public services need to be able to deliver in their non-competitive environment..........

The bottom line is if you reduce to four days then you HAVE to increase productivity 20% just to meet what you were producing on a five day week. if you want to produce more than what you were producing on a 5 day week you have to operate above that 20% improvement for four days. I cant see it. Add into that people working one day a week to make up for no one in the office on their 5th day. Huge wellness there for the employer.

If going to a four day week is such a good idea, why not go to 3 ?

As an old German economist commented on the reductions in France’s working week some years ago “ I know of no one who has become wealthier by working less hard “

This seems like a good direction on the surface of it. Most people do work 40-50 hrs a week but productivity would certainly not be equivalent to 40-50 hours. Take out breaks, corridor social conversations, personal call etc and productivity would be similar to 3-4 days of work per week. So why not condense that actual presence in an office and spend time doing other things you enjoy, like spending time with family, sports or hobbies.

Some companies are trying out 4 days weeks already and with the ability to connect from anywhere, employees should get more flexibility than being stuck in an office for 40-50 hours.