New Zealand can improve well-being through improved policymaking and housing and migration reforms, the Organisation for Economic Co-operation and Development says.
A new report from the OECD found that NZ’s economy has stabilised, with solid growth supporting well-being through jobs and incomes.
The international policy think tank argues continued application of a well-being approach to policymaking will encourage a “more sustainable and inclusive economy for all New Zealanders”.
“Economic growth is an important driver of well-being through its positive contribution to jobs and income”, the report said.
Despite a projected 2.5% growth this year and next, and generally high levels of well-being, there are still challenges.
“Life is good for most New Zealanders, with high employment, an exceptional natural environment and strong levels of social support and trust,” OECD Deputy Secretary-General Ulrik Vestergaard Knudsen said.
“But not everyone enjoys the same levels of well-being, with gaps in health, education, employment, and income. The challenge going forward will be to continue improving well-being through building a more productive, sustainable and inclusive economy.”
Productivity and earnings are relatively low in New Zealand, the survey found. This is likely due to geographical remoteness, insufficient scale, qualification and skills mismatches, weak competitive pressures and low rates of capital investment and R&D activity.
OECD suggests policy settings are adjusted to combat this, by fostering innovation, business dynamism and competition.
Improving well-being for Māori, Pasifika, sole parents and children, through better targeted income, education, health and housing policies should be a priority, the report said.
While NZ’s 2019 Budget used well-being evidence to set priorities, explore policy options and promote agency collaboration, the government should now apply this to other policy tools, such as regulatory impact assessment and evaluation. OECD argues this will make policy processes more effective, through targeted, more coordinated action and deeper understanding of trade-offs.
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Improved measurement of natural capital, innovation, human capital, cultural identity and the integration of indigenous perspectives could also strengthen the well-being evidence base.
Adequate resources for regularly collecting key indicators and track inequalities should also be secured.
Rising house prices, dropping affordability and high rates of homelessness are also issues which must be addressed, the report said, with reforms to quicken response to demand.
Replacing restrictive construction regulations with rules that facilitate densification and new sources of funding for infrastructure – such as special purpose vehicles financed by targeted rates – could alleviate funding pressures.
New rental housing and increased social housing in areas with shortages should receive greater priority.
Immigration has generally increased well-being, but migration policy could benefit from more effective targeting to address skills and labour shortages and better integrate migrants into the labour market.
The report also addressed water and climate change as key challenges for future well-being.
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It found pollution from farming and urban growth is reducing water quality, and water is scarce in some regions. To combat this, OECD recommended NZ agree iwi (tribal)/Māori rights to water and expand water pricing or permit trading.
It also made suggestions relating to the NZ Emissions Trading Scheme and ways to ease NZ’s transition to a low emissions economy.
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