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RUBY:

From Schwartz Media, I’m Ruby Jones this is 7am.

An idea that Australia discarded a decade ago will return on Tuesday night.

That idea, a so-called “wellbeing budget” is being talked up by the Treasurer, Jim Chalmers.

Chalmers has promised that Australia will follow countries like Scotland and New Zealand in judging the success of government spending, not just against GDP and income per person, but based on whether it improves the wellbeing of the Australian people.

Today, social researcher and director of research at 89 Degrees East, Rebecca Huntley, on whether a budget can actually make us happier.

It’s Monday, October 24.

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RUBY:

So, Rebecca, tomorrow the Labor government is going to deliver its first budget. And during the election, and at several points since then, we've heard the Treasurer, Jim Chalmers, saying that his first budget is going to be a wellbeing budget. So, can you maybe start by just telling me what it is that you think that Chalmers means when he says that?

REBECCA:

At the heart of a wellbeing budget is the kinds of issues that we know impact the economy that are not conventionally seen as economic. So, it's actually about how you measure those things beyond the traditional economic tools that we know, things like GDP, income per capita, things like that. Treasury's mission is actually to improve the wellbeing of the Australian community. When you measure wellbeing in terms of what's actually happening in our society, yes, we need to know that people are well paid and they're working, if they can work, and all those other things. But do they have secure housing? Do they live in clean environments? Are they physically and mentally healthy? Do they feel part of their community? Do they have spare time to be able to contribute to their community? All those kinds of things that we know boost productivity, make us better workers, and make our society prosperous in the broader sense of the term.

So, what wellbeing does in the budget is it tries to measure those things, it tries to calculate them, it tries to think about the kinds of policies in the architecture of the budget as actually drawing on those kinds of things. So, it's ambitious, but it's not unprecedented. And in so many ways, if you don't have broader wellbeing in the community—happy, healthy, connected citizens, there's going to be an economic downside to that.

RUBY:

Hm, and when Chalmers first began speaking about wellbeing in the context of an Australian budget, he was met with some pretty incredulous kind of criticism from the Coalition, wasn't he?

REBECCA:

Yes, yes. Particularly the then-Treasurer under the previous government derided him for being a bit of a hippy.

Archival tape – Joshua Frydenberg:

“Robes are flowing, incense is burning, Mr. Speaker. Beads in one hand and speech in the other hand, Mr. Speaker. Gone, gone are the seats. Gone are the benches, Mr, Speaker. And in their place, meditation mats for all, Mr. Speaker. Meditation mats for all…”

REBECCA:

Now that Treasurer has a lot of time as a private citizen to reflect on his comments and thoughts about whether they were justified or not. It's a criticism that we're probably going to hear of the Treasurer.

Archival tape – Sky News:

“The Government will implement a controversial shift in strategy with the federal budget this year. Apart from the usual targets of employment and inflation, it's expected to measure wellbeing, something it will adapt from New Zealand.”

Archival tape – Sky News:

“I think this is peak woke and it can stay in New Zealand. Don't bring it here…”

REBECCA:

And in many ways, kind of, wellbeing budgetary tools have been associated with progressive governments, but not always.

Archival tape – Treasurer Jim Chalmers:

“I do want to have better ways to measure progress and to measure the intergenerational consequences of our policies.”

REBECCA:

So sometimes progressive governments have implemented these wellbeing frameworks and they've been retained by conservative governments because they are important and they work.

Archival tape – ABC News

“The idea of a wellbeing budget has been taken up in a number of other countries, most notably New Zealand, but also in Iceland, Finland, Scotland and Wales.”

RUBY:

And this idea, the idea that a budget should go beyond economics and we should really be thinking about the wellbeing of people in any particular country. It's not a new idea, is it? We've seen it in other places like New Zealand and Scotland. But can you tell me where it comes from? When did we first start to hear about wellbeing in the context of the economy?

REBECCA:

Lots of forward thinking economists trained in classical economics have always realised that there was a bit of a shortfall in economic thinking about some of these questions. How can Treasury make the kinds of decisions that maximise the freedoms and the choices that people have to live a life that they value? In the conversations previous to the work that I've done about the community attitudes to wellbeing and the conversations I've had with current and former public servants, what struck me in those conversations was that noneconomic matters have always been considered when governments have made economic decisions, they just haven't been given any rigour or structure around them.

So, this provides a formula in terms of measurements, in terms of actually incorporating these issues formally into the kinds of decision making that Treasury might make. So, you've got a lot of writing from economists and philosophers around this, informing public servants who've tried to find a way to codify that and actually bring it to life in the way that governments are making those decisions. And now we of course see the ACT and to some extent, New South Wales, thinking about these issues as well.

And of course, Chalmers was a staffer at the time in which this approach was being used by Treasury. He's working for the then-Treasurer, Wayne Swan. So he had seen that approach and so it's not something that he's just alighted on in the last couple of years as a kind of gimmick. It's something that he saw, he valued, he understood, he thought was actually actionable within federal government, actually useful. And so now he's revived it and that's a really interesting thing given we are right in the middle of a kind of—a deeply material cost of living, you know, energy crisis, issues around housing affordability, all of those kinds of things, as well as significant amounts of government debt—all of those other kinds of things. So, that he’s trying to carve out a way to talk about this must mean that he's committed to it and also believes that it actually can work and lift the quality of life and standard of living of Australians in a way that just conventional approaches to budgets might not be able to do.

RUBY:

Okay, and so in practical terms then, what does it actually mean to structure a budget around the idea of wellbeing? What does that actually look like?

REBECCA:

So, basically what I think they're going to try and do is that every year when they look at the budget, they'll say, you know, there are more or less jobs, you know, higher GDP or not, this is where the public debt is. But they will also have things like, we've got cleaner air, right, more green space, people are feeling physically better. So, there are a range of different measurements we can use with all of those in terms of measuring progress. One of the things that some people get anxious about with wellbeing is not only how do you find it, but how do you measure it.

When I say to people, how are you feeling? They'll talk about things like, I'm worried about electricity prices, but they'll also talk about, you know, I'm worried about the mental health crisis in my kids and people their age, and I'm really worried about the fires. Like, people's concerns are much broader.

Archival tape – News Reporter:

“It’s one of the reasons governments around the world are moving towards wellbeing economics. Measuring quality of life standards and focusing government decision making on improving them.”

Archival tape – News Reporter:

“So, these approaches look at putting the wellbeing of citizens, their ability to meet their needs, both now and in the future, at the heart of policy decision making, with a focus on making it sustainable both economically and environmentally.”

REBECCA:

And given the budget is probably the most important political statement that the government releases every year, like other than in an election. It's the thing that the government says that kind of indicates what it wants to do. It's just crazy that that's a narrow economic document, it has to be a bigger document about what we want our society to be because a government isn't a corporation. A government's responsible for more than just making sure that Australia makes money. It's responsible for so much more and the budget should embrace some of that.

RUBY:

We’ll be back in a moment.

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RUBY:

Rebecca, the idea of a wellbeing budget, as we’ve said, is not new. In fact, we've seen it used in New Zealand for about four years now, but has it actually proved successful—has using these other measures to judge success actually delivered results?

REBECCA:

It has had its detractors and its critics.

Archival tape – News Reporter:

“Officials trying to revamp the country's mental health services are being accused of being a sloth at the helm of the Titanic…”

REBECCA:

But it has also given the government a range of ways to talk about the economy to the population in a way that's been relatively well embraced by them. But there has been some criticism.

Archival tape – Radio New Zealand:

“There is no one policy across the country that's going to fix any of this and a lot of the time that actually needs to stay away from that high-level policy making. It really does need to be grassroots, it needs to be community driven.”

REBECCA:

And of course, particularly when you think about the times we live in, pandemic and all this global uncertainty. This is not something that's going to yield dividends in 12 months time, like you have to start telling that story. This is something that's a long term project, particularly given some of the really entrenched problems that we have in our society, for example, and the research that we did around the wellbeing budget, we did some community attitudes research around it, we asked people whether they thought a wellbeing budget was a good idea, 69% of people thinking it was a good idea.
But what elements of a wellbeing budget did they want to see? I mean, one of the big ones was housing affordability and that is not going to be solved in 12 months time by a wellbeing budget because it is an entrenched problem in Australia being built up for 30 years around affordability, accessibility of housing.

RUBY:

It's interesting that you raise the example of housing affordability because it's clear that reform in that area would really make a big difference to people's lives and it’s one of the main drivers in Australia of inequality. But it's this policy area that successive governments haven't addressed and this current Labor government has no intention of conducting any major reform in. And I suppose that really goes to the heart of the issue here around a wellbeing budget which is, will it actually drive reform—policy reform—or will it end up being a kind of hollow concept?

REBECCA:

Yeah, I mean, I think there's always that thing where you have to measure something to be able to do things about it. So, measurement itself is really important. That in the hands of bureaucrats, in the hands of the third sector and people externally trying to lobby for change can be really effective because if the government is measuring things and saying things that are important to them and they have to, with each successive budget, show whether they've moved the dial at all, then that gives you an opening. That's the thing.

I think that this is a wonderful start, it's a wonderful foundation. In some ways, in the current political environment, it's quite a brave thing for the Treasurer to do. Now, the real challenge is getting the job done, communicating that to the population, showing that there's progress, even small amounts of progress with some of these very difficult questions. There's a trajectory forward, one of progress, and that there's a willingness to try and test different things that will move the dial on those kinds of questions. And I think the other thing, I was just kind of thinking about all the various benefits of this and reflecting on, you know, nearly 20 years of listening to Australians talk about budgets. So often in this field, just after budgets, some people think that budgets have nothing to do with them, like if they're not going to get a tax break or if they don't have kids or if they don't own a home. A lot of people say—or they’re not a business, small business or big business. They often think, well, what's the budget got to do with me?

So, by expanding and wrapping around GDP, a range of other considerations that matter to everybody, my hope is that you actually get greater community engagement with budgets because it has more relevance. Like everybody in Australia has a stake in the environment, mental and physical health, housing. Not everybody in Australia is fascinated about what will happen with one tax or the other. So, it allows a kind of broader ability to talk about our society to the community, which I think can only be a good thing.

RUBY:

And just finally, how should we judge if this approach is successful? If in five or ten years time, if we're looking back at this approach, how should we measure its success?

REBECCA:

I think that what we'll start to see is more creative, joined-up policy making to shift some of these really thorny questions that have continued to plague our society over, you know, the last 20 or 30 years.

And if in five or ten years time, we've still got runaway problems with mental health and mental health funding and problems with how we address mental health issues. If we're still getting young people fully employed in their mid-twenties saying, I'm never going on in my own home until my parents die, then we know that this approach has failed. But it is a long term approach, it does take time to be embedded. And more importantly, it's an approach that needs to be embraced across the political spectrum, because there's nothing left wing about caring about whether people can own their own home or they're healthy and happy, like it should be just what all governments are concerned about.

So I think that’s it, if we're managing to chip away at some of these key policy questions that have only gotten worse, despite the amount of public angst and media attention on those issues, then this will have worked.

RUBY:

Rebecca, thank you so much for your time.

REBECCA:

Thank you.

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Also in the news today…

Australia and Japan have signed a significant security agreement that will see Japanese troops train together with Australian forces in the Northern Territory, and commits both countries to greater coordination in addressing regional security threats.

Anthony Albanese signed the deal with Japanese Prime Minister Fumio Kishida over the weekend in Perth.
And Russia and the United States had a rare high-level security discussion, with Russia’s minister of defense speaking directly with the US Defense Secretary over the weekend.

The Pentagon has refused to give details of what was talked about on the call, but did say the situation in Ukraine was discussed and a spokesperson emphasised the need to keep channels of communication open between the two superpowers as tensions continue to rise.

I’m Ruby Jones, this is 7am, see you tomorrow.

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