New Zealand scraps the GDP measure – starts measuring well-being instead
(GDP is a measure of economic activity, not welfare.)

Many have questioned the GDP measure as the best way to measure a country’s prosperity and growth, but few have taken it into practical action. The world’s youngest female prime minister, Jacinda Ardern, has introduced a new way of measuring development in Nya Zeeland which is not only about economic growth.

The country has introduced a new way of looking at growth in New Zealand. Starting this year (2019), the New Zealand government will presenta ”well-being budget”to measure the effect long-term political decisions have on people’s lives.

“In New Zealand we have about 3 percent growth and 3.9 percent unemployment. By traditional standards, people would have looked at us and said ‘you’re doing well’. But we have a staggeringly high rate of homelessness and among the highest suicide rates among young people in OECD countries. Our mental health and well-being is not what it should be,” she said in connection with the summit in Davos.

Jacinda Ardern believes that trade wars and Brexit are symptoms of people feeling frustrated that the political and economic system has forgotten them. Therefore, she believes that politics must be more altruistic (humanity, selflessness,, the opposite of egoism), which means helping others without wanting anything in return). and more long-term to address the deep-rooted challenges we face as economies change.

To draw attention to the problems, she has produced”the living standards framework”, a kind of measuring tool that politicians must relate to in their decision-making. The tool measures and compares four different indicators of well-being: 

1 social capital = society’s needs,
2 human capital = people’s needs,
3 natural capital = nature’s needs and
4 financial capital. = needs of the economy
Only by looking after all four can you measure the nation’s well-being as a whole, according to the decision-makers.

Quite concretely coming child poverty statistics to be presented in each budget. In addition, every minister who wants to use tax money must show how it should be done to promote the country on a level that spans several generations.

“Some of the work we are doing now will not yield results only in 20 years. But if you look at politics through a lens of kindness, empathy and well-being, it doesn’t really matter what happens over decades,” she said in connection with Davos