Part 1: Introduction

Commentary on Te Tai Waiora: Wellbeing in Aotearoa New Zealand.

1.1
The Public Finance Act 1989 requires the Treasury to prepare a report about New Zealand's well-being at least once every four years. In November 2022, the Treasury published its first well-being report, Te Tai Waiora: Wellbeing in Aotearoa New Zealand (Te Tai Waiora).1

1.2
In this Part, we:

What is well-being?

1.3
Published research suggests that there are three main (and overlapping) ways to consider well-being:2

  • As a philosophical exercise, which focuses on what a good life is for somebody.
  • As a psychological exercise, which focuses on feeling good, positive relationships, and people functioning effectively.
  • As an economic exercise, which focuses on concepts such as welfare, utility, capabilities, happiness, and sustainability.

1.4
These three ways to consider well-being have an important implication: what matters most to people is at the heart of understanding well-being. This also means that well-being can provide another way of thinking about and measuring what success might look like to a nation of people.3

1.5
However, what well-being (or success) looks like to a nation will be different to what it looks like to an individual. Individual well-being is personal and subjective. A nation's well-being is about how we are doing as individuals, communities, and as a nation.

1.6
This means that national well-being is often more generalised and objective. For example, the well-being of a nation includes the state of any national resources needed to maintain people's individual well-being over time.

1.7
Te Tai Waiora notes that New Zealand's well-being "refers to what it means for our lives to go well".4 In our view, this is a good starting point.

1.8
Other countries also explain national well-being in a similar all-encompassing way. For example, well-being reports from Wales and the Netherlands describe national well-being as quality of life.5 In Scotland, national well-being is about living well.6 In the United Kingdom (UK), national well-being is generally about how people are doing.7

1.9
These all-encompassing explanations are necessary because well-being can have different meanings to different people in different places. Michelle Hippolite, the former chief executive of Te Puni Kōkiri, observed that Māori have their own understanding of well-being "that draws on cultural values, beliefs, social norms and indigenous knowledge".8

1.10
To prepare a report about a nation's well-being is not easy. It can require:

  • collecting and summarising comprehensive information about what is important to individuals, communities, and a nation;
  • understanding how this information might have changed over time or across the population;
  • considering what this information might mean for the progress of the nation's well-being and its current and future state; and
  • considering, more widely, whether this information has any implications for the well-being of other communities or other nations.

1.11
This information can sometimes be quite technical, incomplete, or dated. It can also be a far-from-perfect representation of what is important for a nation's well-being.

The Treasury's duty to prepare a well-being report

1.12
The Public Finance Act is one of the main statutes underpinning the government's financial management and accountability system. Part 2 of the Act focuses on fiscal responsibility and well-being. It requires:

  • the government to pursue its policy objectives in accordance with the principles of responsible fiscal management; and
  • the Treasury and the Minister of Finance to regularly report and promote accountability to Parliament for how public financial resources are used.

1.13
The Treasury's duty to prepare a regular report on well-being arose from a 2020 amendment to the Public Finance Act. The amendment also required well-being objectives to be incorporated into annual Budget processes. The overall intent was to build a broader level of information and understanding about New Zealand's well-being and to apply that broader understanding across the government.

1.14
To help achieve and apply this broader understanding, the 2020 amendment required well-being objectives to be incorporated into Budget processes and the Treasury to report on the state of New Zealand's well-being at least once every four years. Section 26NB(2) of the Public Finance Act states that:

Using indicators, the [well-being] report must describe –

(a) the state of wellbeing in New Zealand; and

(b) how the state of wellbeing in New Zealand has changed over time; and

(c) the sustainability of, and any risk to, the state of wellbeing in New Zealand.

1.15
The Public Finance Act provides the Treasury with wide discretion about how to report on New Zealand's well-being. The only requirement is that the indicators must be "selected, and the report prepared, by the Treasury using its best professional judgements".

Why are we doing this commentary?

1.16
We have an ongoing interest in how well public finance and accountability systems are working and how New Zealanders are kept informed about what the public sector does and how it does it. Part of our role is to help Parliament and the public understand the information that the public sector reports.

1.17
At a whole-of-government level, most of the stewardship reports that the Treasury is responsible for focus on the government's finances (for example, He Tirohanga Mokopuna 2021: The Treasury's combined Statement on the Long-term Fiscal Position and Long-term Insights Briefing, and He Puna Hao Pātiki: 2022 Investment Statement). In contrast, Te Tai Waiora focuses on New Zealand's intergenerational well-being from a wider perspective than just the government and its finances.

1.18
Providing a picture of New Zealand's well-being is important for understanding what matters to New Zealanders. Te Tai Waiora is a new and innovative report for the Treasury. In our view, the report presents a significant opportunity to provide a comprehensive and trustworthy account of the state of New Zealand's well-being that the government, Parliament, and the public can rely on and use.

1.19
It is likely that the Treasury will publish its second well-being report in 2026. We understand that the Treasury may decide to engage and collaborate more when preparing future well-being reports so that it can incorporate a wider range of perspectives from communities and the general public.

1.20
We are interested in supporting the Treasury to continually improve Te Tai Waiora and its position as a stewardship report. Future Auditors-General might also consider looking at how well these reports reflect these wider perspectives and how the government uses them to inform its policies and priorities.

Our commentary's scope and limitations

1.21
The Public Finance Act clearly sets out what the well-being report should describe (see paragraph 1.14). However, it does not state how the Treasury should report that information or how the information could be used to build a broad understanding of New Zealand's well-being within and outside of the government.

1.22
After reviewing relevant background documents, we developed three main objectives that we consider are important for the report to help achieve a broad understanding of well-being and build its use across government (see Part 3).

1.23
We also looked at how other countries and international organisations report on well-being. We talked with staff at the Treasury involved in preparing Te Tai Waiora and people in other countries who prepare reports on well-being.

1.24
We do not provide assurance over the frameworks,9 the indicators, or the analysis in Te Tai Waiora. We also do not comment on:

  • the appropriateness of the Living Standards Framework or He Ara Waiora;
  • the relative merits of any priorities that Te Tai Waiora emphasises;
  • how well the government has used Te Tai Waiora to inform the Budget or its other work;
  • the likelihood or impact of the trends and risks that Te Tai Waiora identifies; or
  • the quality of the underlying data used in the report.

1.25
We do not comment on government policy. We only look at how well particular policies have been implemented (such as their effectiveness and efficiency). When we refer to policy choices or decisions in our commentary, it is only to assess whether Te Tai Waiora adequately identifies and discusses them. We do not discuss the merits of any policy option or decision.

Structure of our commentary

1.26
In Part 2, we look at some of the different kinds of well-being reports in New Zealand and internationally, and summarise the common themes in their preparation, content, and form.

1.27
In Part 3, we outline the perspectives on well-being that the Treasury uses, set out what we consider the objectives of Te Tai Waiora to be, discuss its place as a stewardship report, and summarise the process of preparing Te Tai Waiora and what it says.

1.28
In Part 4, we comment on how well the Treasury has realised the objectives for Te Tai Waiora.

1.29
In the Appendix, we briefly describe the background papers that the Treasury prepared to support Te Tai Waiora.

1: The Treasury (2022), Te Tai Waiora: Wellbeing in Aotearoa New Zealand. The Treasury also published background papers alongside Te Tai Waiora, and we refer to these where relevant. These papers are listed in the Appendix.

2: See Alexandrova, A and Fabian, M (2022), The science of wellbeing, the John Templeton Foundation, Part 1 and Weijers, D (2020), "Teaching well-being/quality of life from a philosophical perspective", in Tonon, GH (Ed), Teaching quality of life in different domains, Vol 79, pages 15-42.

3: See Hon Grant Robertson's 2019 speech "New Zealand's first Wellbeing Budget", at beehive.govt.nz, and Weijers, D (2020), "Teaching well-being/quality of life from a philosophical perspective", in Tonon, GH (Ed), Teaching quality of life in different domains, Vol 79, pages 15-42.

4: The Treasury (2022), Te Tai Waiora: Wellbeing in Aotearoa New Zealand, page 6.

5: See the "Background" chapter in CBS (2022), Monitor of Well-being and the sustainable development goals 2022, at longreads.cbs.nl, and "The Well-being of Future Generations", at gov.wales.

6: See "National Performance Framework Wellbeing: Wha's like us?", at blogs.gov.scot.

7: See "How are we doing? ONS update personal wellbeing indicators and figures at Local Authority level", :at whatworkswellbeing.org.

8: Te Puni Kōkiri (2019), "Providing a Māori perspective on wellbeing", media statement, at tpk.govt.nz.

9: A well-being framework sets out the elements of well-being (usually called "domains"), such as health, housing, and safety. Indicators are used to illustrate these elements.