B.2 THE WELLBEING BUDGET 30 May 2019 ISBN: 978-1-98-858041-8 (print), 978-1-98-858042-5 (online) THE WELLBEING BUDGET A new frontline Tackling service for mental Reaching 5,600 homelessness, TAKING health with a Suicide prevention MENTAL extra secondary with 1,044 new $455m programme services get a HEALTH students with more places – Housing SERIOUSLY providing access $40m boost nurses in schools First will now reach for 325,000 people 2,700 people by 2023/24 Breaking the Taking financial Specialist services cycle for children pressure off Lifting incomes IMPROVING as part of a $320m in State care, parents by by indexing main CHILD package to address including helping increasing funding benefitsand WELLBEING family and 3,000 young to decile 1-7 schools removing punitive sexual violence people into so they don’t need sanctions independent living to ask for donations Major boost for An additional Ensuring te reo SUPPORTING Whānau Ora, 2,200 young A $12m programme MĀORI AND Māori and Pacific including a focus on people in the targeting PASIFIKA languages survive ASPIRATIONS health and reducing Pacific Employment rheumatic fever and thrive reoffending Support Service Bridging the Nearly $200m set Opportunities for $106m injection venture capital aside for vocational apprenticeships into innovation to BUILDING A gap, with a $300m education reforms for nearly 2,000 PRODUCTIVE help New Zealand fund so start-ups to boost young people NATION transition to a can grow and apprenticeships through Mana low‑carbon future succeed and trade training in Mahi Helping farmers Encouraging Freshwater focus Over $1b with the climate TRANSFORMING sustainable improving water boost in funding change challenge THE ECONOMY land use with a quality in at-risk for KiwiRail by investing in $229m package catchments scientific research 10‑year $1.2b investment Bowel screening Investing in $1.7b to fix INVESTING IN in schools, programme better and more hospitals over NEW ZEALAND starting with extended to five healthcare with the next two years $287m this year more DHBs $2.9b for DHBs for new buildings CONTENTS FROM THE FROM THE PRIME MINISTER MINISTER OF FINANCE 2 3 THE WELLBEING NEW ZEALAND’S CHILD POVERTY BUDGET WELLBEING REPORT 4 11 20 PRIORITIES FOR THE WELLBEING BUDGET TAKING MENTAL IMPROVING CHILD SUPPORTING MĀORI AND HEALTH SERIOUSLY WELLBEING PASIFIKA ASPIRATIONS 30 42 60 BUILDING A TRANSFORMING INVESTING IN PRODUCTIVE NATION THE ECONOMY NEW ZEALAND 74 84 98 THE TREASURY’S THE FISCAL ECONOMIC AND STRATEGY FISCAL FORECASTS GLOSSARY 118 132 143 THE WELLBEING BUDGET FROM THE PRIME MINISTER Welcome to the Coalition Government’s first Wellbeing Budget. It’s something you will have heard a lot of talk about and now it’s a reality. It’s a reality because while economic growth is important – and something we will continue to pursue – it alone does not guarantee improvements to our living standards. Nor does it measure the quality of economic activity or take into account who benefits and who is left out or left behind. We know for example that New Zealand has had strong growth for a number of years, all the while experiencing some of the highest rates of suicide, unacceptable homelessness and shameful rates of family violence and child poverty. Growth alone does not lead to a great country. So it’s time to focus on those things that do. Our five Wellbeing Budget priorities show how we have broadened our definition of success for our country to one that incorporates not just the health of our finances, but also of our natural resources, people and communities. They show that we are doing things differently by: • supporting mental wellbeing for all New Zealanders, with a special focus on under 24-year-olds • reducing child poverty and improving child wellbeing, including addressing family violence • lifting Māori and Pacific incomes, skills and opportunities • supporting a thriving nation in the digital age through innovation, social and economic opportunities • creating opportunities for productive businesses, regions, iwi and others to transition to a sustainable and low-emissions economy. There are real people behind every one of these priorities and this Budget will give them the opportunities they don’t currently have. The opportunity to be trained or retrained, to have a warm, dry home, to escape the cycle of family violence or to grow a business and achieve success. I am proud of this Wellbeing Budget. It positions our country to begin tackling our long-term challenges and puts in place what we need to make a difference now and for generations to come. RT HON JACINDA ARDERN Prime Minister of New Zealand 2 BUDGET 2019 FROM THE MINISTER OF FINANCE It is my absolute pleasure to present Budget 2019 – the Wellbeing Budget. This Budget signals a new approach to how government works, by placing the wellbeing of New Zealanders at the heart of what we do. This approach represents a significant departure from the status quo. Budgets have traditionally focused on a limited set of economic data. Success has been declared on the basis of a narrow range of indicators, like GDP growth. But New Zealanders have questioned that claim of success when they have seen other things that we hold dear – child wellbeing, a warm, dry home, or being able to swim in our rivers and lakes – getting steadily worse. The old ways have left too many people behind. It is time to change. New Zealanders want us to measure our success in line with their values – the importance of fairness, the protection of the environment, the strength of our communities. That is what this Wellbeing Budget sets out to do. Many countries around the world have begun to look at different ways of measuring success to better reflect the wellbeing of their people. This Budget goes further and puts wellbeing at the heart of everything we do. To set the priorities for this Budget, we used evidence and expert advice to tell us where we could make the greatest difference to the wellbeing of New Zealanders. Each bid for funding required a wellbeing analysis to make sure that funding would address those priorities. We have broken down the silos of government to support programmes that bring together agencies to solve the big challenges of our time. In this first Wellbeing Budget our priorities are tackling long-term challenges facing New Zealand. We’re taking mental health seriously, addressing child poverty and domestic violence, supporting Māori and Pasifika aspirations, transforming our economy and building our productivity. Alongside them we are balancing the need for fiscal sustainability for future generations and making long term infrastructure investments, such as in our schools and hospitals, and supporting the economy. We do not claim perfection in this first Wellbeing Budget, and we will not fix everything in one go. This is just the start of a programme of change. The Coalition Government is committed to the wellbeing approach, now and in the future. I want to thank all three parties that make up this Government for their commitment, and to doing the right thing for New Zealand for generations to come. Budget 2019 is a landmark moment, and I am proud to present it. HON GRANT ROBERTSON Minister of Finance 3 THE WELLBEING BUDGET THE WELLBEING BUDGET 4 BUDGET 2019 THE WELLBEING BUDGET THE WELLBEING BUDGET What is wellbeing? Wellbeing is when people are able to lead fulfilling lives with purpose, balance and meaning to them. Giving more New Zealanders capabilities to enjoy good wellbeing requires tackling the long-term challenges we face as a country, like the mental health crisis, child poverty and domestic violence. It means improving the state of our environment, the strength of our communities and the performance of our economy. Sustainable economic growth is an important contributor, but many factors determine people’s wellbeing. Just because a country is doing well economically does not mean all of its people are. This has been the case for New Zealand. Too many people have been left behind or left out. The Wellbeing Budget endeavours to give more New Zealanders the ability to share in the benefits of a strong and growing economy. We now know that we cannot meaningfully address complex problems like child poverty, inequality and climate change through traditional ways of working. Making the best choices for current and future generations requires looking beyond economic growth on its own and considering social, environmental and economic implications together. The Wellbeing Budget does this in three ways: 1. Breaking down agency silos and working across government to assess, develop and implement policies that improve wellbeing 2. Focusing on outcomes that meet the needs of present generations at the same time as thinking about the long-term impacts for future generations 3. Tracking our progress with broader measures of success, including the health of our finances, natural resources, people and communities. Achieving such fundamental change will take time, but we are committed to making significant progress. The Wellbeing Budget marks the start of this process. How does Budget 2019 deliver a wellbeing approach? The Coalition Government is proud to deliver the country’s first Wellbeing Budget. It represents a significant change from how Budgets have previously been designed, developed and presented (see Figure 1). 5 THE WELLBEING BUDGET Figure 1 – Developing a Wellbeing Budget Traditional Budget Process The Treasury Cabinet agrees Cabinet assesses to broad Ministers and agrees to a Budget initiatives,