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When NZ's Worst Finance Minister Ever, Grant Robertson, retired from politics to become Vice Chancellor of Otago University, the Spinoff reported, "As finance minister & alongside Ardern as PM, Robertson helped spearhead a “wellbeing” approach to government funding, seen most prominently under his successive “wellbeing budgets”. This first began in 2019, with five key areas being targeted including mental health and child wellbeing". Let's see how they did targeting "well-being". Over the period from 2006-10 to 2021-23, NZ experienced its biggest decline in well-being since records began. Out of 134 countries, we experienced the 26th biggest drop (see below). What group drove the decline? The young. By contrast, the elderly in NZ rank amongst the happiest, at 6th in the world. Although happiness has decreased in all age groups, our young (aged < 30 years old) are now, in 2021-2023, the least happy age group. This is a big change from 2006-2010, when the young were happier than those in midlife groups, and about as happy as those aged 60 & over. The drop was greater for females. Young Kiwis now rank around 27th in the world.

For a government that targeted the mental health of the young, it could not have done more to destroy their lives. How did Ardern, Hipkins & Robertson manage it? First, they destroyed meritocracy in NZ, whereby the young who had tried hardest & done the best could expect to receive the best job offers & opportunities. Instead the achievements of our youth stopped mattering - other factors came into play to determine whether you would be successful, all in the name of equity. Countries that ditch efficiency to put their entire focus on equity end up with nothing to be divided equally amongst everyone. Second, we knew at the time of the second lockdown at the end of 2021 that it was the elderly who were the chief benefactors. The young, who had only the tiniest of chances of being badly afflicted by Covid, had their education and futures sacrificed. It now shows up in the statistics. The elderly are having a ball in NZ whilst the young sink into despair. I almost fell off my chair in 2022 when, in the middle of that year, a student said to me that my class was his first "in-person", not-online, experience during his entire course of study. The whole of 2020, the whole of 2021, and half of 2022 had been wiped in tertiary institutions as students went off campus and on-line.

How ironic that the former Finance Minister, who did so much to lower the well-being of the young, is now the boss of University taking charge of the education of the young.

Change in Wellbeing from 2006-10 to 2021-23


Why is National getting so many bad headlines for its budget cuts? Part of the answer may lie in MMP. Before the election, the Nats had prepared a fully costed budget. One could, of course, argue about whether its foreign (residential) buyers property tax, for example, would raise as much as the Nats estimated. The media featured endless stories on that topic, which turned out to be a waste of time. Why? Because in the MMP negotiations, NZ First didn't want to allow any foreign buyers into that market, so the tax on them was scuttled. The Coalition Agreement, a feature of MMP governments, has thereby had monumental consequences for our economic future. Whether it is cuts to suicide prevention or support for the disabled, you can blame a whole range of them on the vetoing by NZ First of National's proposed foreign buyer tax. NZ First also will not entertain a single change to the retirement age, since the elderly comprise much of its support base. More broadly, MMP has meant that the proposed budgets of every party, including Labour and National, are nothing more than marketing gimmicks leading up to NZ General Elections. Since the major parties will almost certainly have to form coalitions, major parts of those budgets will end up being dropped in ways that we, the voters. cannot predict.

The implications for the country are not obvious. Some may say its good to have these compromises since that's democracy in action and reflects voters' wishes. However, it also means there is no coherence to any new government's economic plans in NZ - they become a mish-mash of different plans, with unpredictable consequences. Imagine if Trump and Biden both won this year's US General Election, which they both probably will - what would be the consequences? But that is somewhat the situation we are in. The revenue loss from National's foreign buyers tax has thrown large parts of the rest of the budget into chaos as Nicola Willis scraps around for cuts. What I can't figure is how most of those cuts are being done without use of cost-benefit analysis, which the new coalition swore to do for every such decision in its coalition agreement. School lunch programs, for example, are strongly supported by cost-benefit analysis in the UK. Telling all departments to make cuts of x%, which Willis has reportedly ordered, rides rough shod over any weighing of costs versus benefits for each particular activity, which should be done on a case by case basis. Ultimately the government appears to be going down the Bill English guide to economics, which is two lines long: cut taxes, cut spending & over time balance the budget. Any deeper ideology or thinking appears to be missing in action.

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Robert MacCulloch

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