OPINION: Covid-19 has affected all of New Zealand – no single person, organisation or area has been immune from the impact of the pandemic and the measures taken to contain its spread.
When it comes to determining the pandemic’s overall impact on the country, gross domestic product (GDP) has been the “go to” measure.
But GDP falls well short when it comes to capturing the full impact of Covid-19 on New Zealanders.
Despite expectations that this will be the biggest fall in GDP over any three months ever, it seems Kiwis mostly remain happy, perhaps even a bit more so. Statistics New Zealand’s wellbeing survey, for exactly the same period, shows our average overall life satisfaction rating was 7.9 out of 10, up slightly on a 2018 survey.
Also, seemingly paradoxically, those rating their overall health as “excellent” during the April-June lockdowns was up markedly on 2018.
GDP is solely a measure of economic progress (or, as we are seeing, regress). It misses many of things we value as Kiwis, for example our personal relationships, the environment and not least our health – the fundamental reason for the lockdowns.
The Government’s wellbeing approach and Treasury’s living standards framework use broader measures of national welfare, recognising the shortcomings of GDP.
A nuanced look at Covid’s impact using Treasury’s living standards framework produces a more mixed report card.
While some of the economic and business indicators have declined, there have been a number of positive responses, particularly on the social side with many of our interactions with fellow Kiwis improving.
The lockdowns also gave us a look at what is possible with the environment but sadly many of the gains made here have already been lost.
- With the election campaign underway, can the law protect voters from fake news and conspiracy theories?
- New Zealand spy agency 'reviewing' Chinese intelligence database for security concerns
- NZX website down again, trading unaffected
- New Zealand's net debt tipped to increase to 50 percent of GDP - Kiwibank chief economist
GDP has its place. It is a great way to compare how the New Zealand economy performs over time and against other countries. It is also used as a proxy, though nowhere near a perfect one, for wellbeing.
In general, wealthy countries are those who can afford to spend more on health, housing and the environment.
And in tough times, the economy becomes much more important for New Zealanders. In an Ipsos poll, published two months into lockdown, nearly half of respondents believed the economy was the country’s number one issue – a four-fold increase on pre-Covid.
But as simple and reliable as GDP is, it should not be used as the scorecard for how we are performing as a nation, particularly as we recover and rebuild. We should also not pursue economic growth purely for the sake of growth and at the expense of our other values.
As ever, we need the right kind of long-term growth. Covid-19 is having an intergenerational cost on Kiwis so we need intergenerational value to be created through the recovery.
We can also take steps to reduce the digital divide and improve our health system so we are more resilient for the future.
We need to measure our progress through a broader suite of measures over the longer term. This is our opportunity to ensure our recovery not only creates jobs but creates jobs which reduce inequality and improve our environmental impact.
