Government champions vulnerable citizens

Insight

Salus populi suprema lex esto*

As the Finance Minister gears up for his inaugural wellbeing budget, the government is also building a political narrative around helping vulnerable citizens.

Although Labour promptly removed the word “vulnerable” from the new Ministry for Children, it could easily apply the term to the old Ministry of Consumer Affairs.

The focus on vulnerable consumers is being led from the top down - witness the Prime Minister’s lashing of petrol companies and the various inquiries into electricity, banking, and insurance and strengthening of the powers of regulators.

The theme fits well with the political philosophies of the three governing parties who are skeptical of a pure, free market approach to deliver fair and equitable outcomes. It will also be something they can all agree on in a year that could be marked by increasing political tension around issues like climate change and capital gains tax.

The focus on vulnerable customers also fits well with the Deputy Prime Minister’s call for a return of the human face of capitalism.

Left-leaning administrations are often accused of being too interventionist or interfering in markets. But, the political winds are blowing in their favour with an electorate ready for some rebalancing of power and levelling of the field. This policy direction has also emboldened regulators who’ve been in a constant arm wrestle with some sectors, while having an arm tied behind their back.

Cognito expects wellbeing and vulnerability will be the making of some politicians too - as is the case with Consumer Affairs Minister Kris Faafoi. Of course, it will also be a test case for Grant Robertson who’s charting new territory with his wellbeing measures and aim to build a more inclusive economy.

Boards and business leaders will do well to heed the government’s warning they must focus on customer outcomes (especially for vulnerable customers) not just profits.

Voters will have the final say on the twin themes of wellbeing and vulnerability, meanwhile, they are the government’s new narrative, with serious policy implications.

 

*The good of the people is the greatest law