3. Economy—Living Standards Framework and Performance MeasurementJAN LOGIE (Green) to the Associate Minister of FinanceEconomy—Living Standards Framework and Performance Measurement3. JAN LOGIE (Green) to the Associate Minister of Finance: What recent progress has there been on development of the Living Standards Framework and other sustainable development indicators?Hon JAMES SHAW (Associate Minister of Finance): Today Treasury published four discussion papers and a position paper on natural capital human capital social capital and a well-being framework. The papers are designed to spark conversations about lifting the quality of policy advice from Government departments by incorporating an intergenerational well-being perspective into policy formation including environmental well-being. Our Government is committed to developing a more fulsome set of measurements for how we're doing as a country and these papers are a valuable contribution. For decades the Greens have been advocating a more holistic view of the economy and well-being rather than a narrow focus on gross domestic product. The Treasury papers today show just how far into the mainstream these ideas have come and that they are a core part of our Government's economic strategy.Jan Logie: Why is the Government working on measuring success differently?Hon JAMES SHAW: What gets measured gets managed. Extending our focus beyond income to broader well-being will help to guide Government decision-making in the interests of all New Zealanders and the ecosystems that sustain us. Alongside the Living Standards Framework Statistics New Zealand is working with Treasury to build a comprehensive measurement framework to support better policy-making.Jan Logie: How will measuring success differently flow into Government decision-making?Hon JAMES SHAW: This work will help to support the Government's intention to amend the Public Finance Act to require reporting on well-being measures. The first step as the House knows is the Prime Minister's work to insert child poverty data into formal budget reporting. Next year the Minister of Finance has signalled a fuller integration for the well-being approach into Budget 2019. To quote a former Green Party co-leader Jeanette Fitzsimons we are working towards a system where our success is counted not by the size of our GDP and our incomes but by the warmth of our relationships with each other and with nature by the health of our children and our elders and our rivers and our land."Jan Logie: Will the Government still be measuring traditional economic indicators like GDP and gross national income?Hon JAMES SHAW: Yes it will but GDP is too narrow and at the same time too generalised to be particularly useful for measuring actual well-being. GDP does not tell us if the poor are getting poorer it does not tell us if homes are cold and damp and unaffordable it does not tell us if our rivers are too dirty to swim in and it doesn't measure the scarcity of resources. In fact Simon Kuznets who standardised the measurement of growth warned "The welfare of a nation can scarcely be inferred from the measure of national income. Economic growth"—he pointed out—"measured only annual flow rather than stocks of wealth and their distribution." Our goal is not just a bigger economy; it's a better economy."