 What I want to talk to you about today, I work for the New Zealand Treasury. The New Zealand Treasury is the government's chief economic and financial advisor. It also has a role as a central agency as the jargon goes, which is about catalyzing, bringing different departments together to think differently about overall economic, social and environmental matters. So the way we, what I've been trying to do over the last four or five years that I've been in government, before that I was in the private sector, is to push along this concept that if you're genuine about well-being, then you have to think about economic, environmental and social issues in an integrated way. The purpose of public policy is to improve people's lives. We have no right to define what is a good life or a bad life. So the puzzle is, what is the role of public policy in trying to improve people's lives without passing a judgment on what those lives be? And we go to Amartya Sen. If you are going to read one more book before you die, you have to read this book, The Idea of Justice. Have a handkerchief next to you because you'll cry for 375 pages. But he talks about, in that context, he talks about giving people the opportunities and capabilities to live the kinds of lives they have reason to value. So that's the platform, philosophical platform for policy. It was very difficult to get this concept across because I'm surrounded by very capable, very analytical people who have studied very traditional economics. And the first challenge was to demonstrate that this wasn't waffle. For those foreigners who don't understand the term waffle, it's just rubbish garbage or whatever you use. And so the challenge was to show that, in fact, using their very economic models I can demonstrate with their own techniques that, in fact, unless you take into account environmental and social matters, the whole thing collapses anyway. And so I spent three years and still doing it, day and night I work on building mathematical models to demonstrate that because that's the language these people understand. To show that, in fact, unless you bring in economics, social, and environmental issues in an integrated way, then the whole thing is not sustainable. So the essence of the model in diagrams is that what we say is the ultimate purpose of policy is to improve intergenerational well-being. In other words, it's not only about today's but also about future generations. And then we argue that the source of well-being is not just material consumption but consumption of spiritual things, leisure, environment, arts, whatever else you want to add to it. So a Nobel Prize economist called Kenneth Arrow, thankfully, defined that as comprehensive consumption in the broadest sense of what we enjoy. And then the model says that the source of comprehensive well-being is comprehensive wealth. In other words, it's not only capital in the machinery sense of human-built capital but also natural resources, social capital, human capital, environmental capital, and economic capital. And then you build a model which says the drivers of that is the growth and protection of those capital stocks, being very aware that they are very interdependent on each other. And then you ask the fundamental question, that's all fine. It looks elegant. It looks attractive. But what could be the role of public policy in that domain? Why what could government do towards improving the capabilities and opportunities of people to live the kinds of lives they have reason to value? Those are the ones that surround what I call the well-being frontier. In other words, public policy by building the right economic, social, and environmental infrastructures because nobody else will do it because you don't do it as a private person because you don't get all the benefits, hence the word externalities, only a public organization would do that. You try to build the infrastructure that gives you a platform for higher material well-being which every study shows is important in people's lives but also care about equity, especially equity not only across society but across generations. In principle, although in the democratic process, typically governments tend to have a short-term perspective, in principle they should be the only ones who talk about generations many centuries forward. Sustainability is not only about economic but also sustainability of all those capital stocks and you can add more to those capital stocks if you wish. And finally in an increasingly diverse world for a country that aspires to be open, welcoming, small, but open, social cohesion. How do you not only get more people to come into this world of New Zealand but also get them to live together in a way that actually generates more creativity and all that kind of stuff, the stuff that is going on right here right now? So finally resilience, in other words, what are the big, big systemic risks that New Zealand may be exposed to and what can we do to invest towards enhancing that resilience? It could be biosecurity issues, it could be economic, it could be social earthquakes and whatever else you want to be. So we frame policy in that way saying that the domain of public policy is to make sure that we push that well-being frontier out by working across those particular dimensions. What does that mean for policy purposes? That's simply a policy triangle and it says at the very bottom although there is very robust evidence and you will fall off your chairs but we had a presentation from a very senior person from the Organization for Economic Cooperation and Development in our building only yesterday saying there is no doubt anymore whichever culture wherever you talk to the fundamentals, domains of well-being, in other words what people actually value is pretty well defined but how you then improve that well-being will depend the cultures and values and history of a place and we need to respect that. On that platform we build infrastructures that make it happen so economic, social and environmental infrastructures. We build the right institutions, it could be schools, hospitals but also the rule of law and various other things, those are fundamental institutions that we build which will also reflect the society in which you're living. That's why you cannot take the school system in Finland and bring it to New Zealand and implant it here or the employment system in Germany and bring it here. It's completely culture and history dependent and then on top of that you start talking about wider things, economic, environmental and social policy interactions. The one that would resonate with you is that there is a big lack of debate in New Zealand how you can increase your material well-being without actually damaging the environment. What kinds of policies can you pursue so they travel together? So for example concurrently you can subsidize and incentivize cleaner technology use which will enhance material well-being and in the schooling and other system encourage and invest in skilling and scientists and so on and also open your doors to skilled people just like yourselves to come in and prosper in the country. So that would be the way you have a public policy surrounding it but sitting on top of that needs to be a very, very clear vision of where New Zealand wants to be and that's a leadership issue. In terms of small countries New Zealand is one of probably the few who resist having a role for government in defining a vision for New Zealand that's against our core psyche. But the framework suggests that in fact you must do that in order to have a coordinated and purposeful existence in a country. So that's the theory you'll be surprised to find out actually although the living standards framework as I've defined it doesn't is not a language that the central government and others use if you look at the total policy package we are pursuing and promoting actually all the pieces are there. There's a huge focus now on eradicating poverty in a way that actually not only gives people money and housing and health and so on but also in investing in skilling them so they can participate productively in society so that's a platform. There's a lot of focus on the other aspects I talked about such as the institutions such as promoting innovation and investing and starting to worry about climate change and that kind of stuff. The beauty of having a framework of the sort is that you don't react to events after they happen. For example we are focusing on poverty now after poverty has become a problem. The risk is we will focus on the environment one day after environment becomes a problem. So when you actually have a coordinated and integrated policy platform of the sort what it does is to encourage you to anticipate that unless you take care of these issues then it will be a problem in the future so even if you're taking a just pure monetary lens on it still you will pay for it so just be aware of that. What are the challenges we are facing right now? The challenges this broader framework is being seen as being anti-material prosperity. So one of the things you good people can do in your discussions and interactions with decision makers and all that is to actually convey the message that it is not that at all that until and unless we take into account these various factors environmental social and economic issues in an integrated way the whole thing collapses as I said earlier anyway. So we should be thinking about these in an integrated way. That's the current major challenge and one of the reasons I engage with groups like yourself is to invite you to be part of that conversation. The other reason I engage with groups like yourself is to ask a very clean question. I have answered my own question as to what could be the role of a government public policy but I would love to hear from people like yourselves when you look from where you are right now into the bureaucracy and machinery of government local or national what would you consider to be the domain of public policy and how can public policy help in promoting and supporting the kind of work you're doing. Especially since New Zealand always hides behind the story that our productivity and material well-being is not as high as it should be because we are small and distant. My perspective on this is completely the opposite. If we can create an environment where all the creative people come and generate ideas and we invest and support in it then this could be an incubator we could scale it up by going to the rest of the world. So that would be the fundamental point. So I'll leave it there and I'll see whether you have any questions. Insults are welcome as well by the way. No problems. Thank you. Thank you.