Treasury, the Government's chief policy adviser, has turned its mind to measuring happiness, the value of unpaid work, the value of leisure and other matters in a bid to improve its policy advice and respond to critics.
Treasury, the Government's chief policy adviser, has turned its mind to measuring happiness, the value of unpaid work, the value of leisure and other matters in a bid to improve its policy advice and respond to critics.
It today published the results of 18 months of research on a living standards framework that emphasises goals and measures beyond economic growth.
"Treasury's role as a central agency with oversight over all significant policy issues across the state sector has also led it to acknowledge that living standards are broader than income alone, and are determined by a wide range of material and non-material factors," the report titled Working Towards Higher Living Standards for New Zealanders said.
The work on living standards was part of internal efforts to enhance policy advice and a response to criticism that Treasury paid insufficient attention to whether higher incomes were the ultimate objective or a way of increasing happiness, the report said.
The framework would improve Treasury's ability to provide ministers with robust advice on economic, fiscal and regulatory issues and on significant policy issues in the wider state sector, the report said.
The government agency most associated with the development of free-market theories said that the period of job losses that occurred in the 1980s in New Zealand disrupted communities both socially and economically.
The report said that unpaid employment, such as caring for children, was of substantial economic value regardless of whether money changed hands or not.
"Volunteering in the community improves the well-being of the volunteer as well as those they are assisting."
Treasury said that in the last decade there has been considerable interest in measuring the happiness of individuals.
It said that some people were hard wired to be happy. Five factors which had an impact on happiness in order of importance were family relationships, financial situation, work, community and friends, and health.
"Income displays an interesting, paradoxical, relationship to happiness," the report said.
At a given point in time, individuals and nations with higher incomes reported higher happiness.
"Yet for most countries happiness has increased little if at all over the last few decades while real incomes have risen dramatically," the report said.
The framework describes a broad range of factors that theory and evidence suggested were important to living standards.
"It also sets out points to consider when developing policy advice: the level and distribution of factors that underpin living standards, and the interactions, trade-offs and synergies among them."
The framework has five key elements and has four types of capital stocks, including social capital.
Treasury concludes that its framework was intended to be used as an input to the policy process, rather than an analytical, prioritisation or decision-making tool in itself.
"Its main value is in the way it encourages a broad understanding of living standards," the report said.
