The outgoing head of Treasury, John Whitehead, has left New Zealand with one of the best parting gifts ever — the groundwork for an alternative set of measures to define ‘progress’.

This is one of the best news stories in my living memory. Why? Simply put, the way we define and measure progress goes to the very core of how we run our economy. Our singular focus on growing GDP has concealed the related decline in other measures of our prosperity, like the rapidly declining quality of water in our rivers and lakes, or the record growth in inequality within New Zealand. If we change the measure, we’re likely to change the outcome.

The draft Treasury paper, Working Towards Higher Living Standards for New Zealanders, is a good start and, if adopted, will help the Government make far better, longer-term policy decisions. However, the indicators they’ve initially chosen reflect the philosophical bias of Treasury towards traditional economic indicators of prosperity. The report is light on environmental measures; only four of the 46 indicators have anything to do with the environment. And, until the indicators are made mandatory, they won’t enjoy the status that GDP, inflation, and unemployment figures currently enjoy.

I’ve already done much of the groundwork for the most important (and measurable) environmental indicators of prosperity. My Public Finance (Sustainable Development Indicators) Amendment Bill proposes 39 environmental indicators that can be included in our national set of accounts. The indicators fall into seven key subcategories relating to our biodiversity, air & atmosphere, water quality, land use, energy use, waste, and population.

I look forward to working with the National Government to advance this important work to enhance the quality of our life and the natural world it depends upon.

© Scoop Media