New Zealand


Policy Performance


Economic Policies

New Zealand’s small size and geographic remoteness have limited the positive effects of structural reforms, leaving the country in the upper-middle ranks (rank 14) in terms of economic policy. After a marginal gain last year, its score on this measure has fallen back to its 2014 level.

Post-earthquake reconstruction, immigration and favorable terms of trade have helped boost growth. Crisis-era debt, moderate by OECD standards, is diminishing significantly as a share of GDP, and a budget surplus was achieved in 2015.

Moderate unemployment rates edged up in late 2015. Australia’s economic slowdown has diminished or even reversed a drain of skilled workers out of New Zealand. Labor-market policies have helped to reduce problematic youth-unemployment rates, but indigenous-community unemployment remains troublesome.

Taxes are comparatively low. Tax reductions have been delayed in pursuit of a budget surplus, while a property tax was imposed to control speculation. R&D policy is a weakness.

Social Policies

With high educational attainments and a strong health system, New Zealand falls into the top ranks internationally (rank 5) with regard to social policies. Its score on this measure has increased by 0.1 point relative to 2014.

The country’s PISA scores are high, and tertiary-education attainments are in the OECD’s top ranks. Vocational skills have been made a policy focus. Social-security benefits are comprehensive, and include income support. Child-poverty rates are high despite efforts to direct resources to low-income families.

The health care system is of high quality and is cost effective, although cost pressures are growing. Generous family policies help support very high fertility rates by OECD standards, and the labor-market participation rate among women is comparatively high. Pension policies prevent poverty, but retirement-age reforms are needed.

Integration policy is largely successful, in part due to a focus on skilled immigration.

Environmental Policies

With a strongly agricultural economy, New Zealand falls into the lower-middle ranks (rank 26) in terms of environmental policy. Its score on this measure has declined by 0.1 point relative to 2014.

Water management and use and greenhouse-gas emissions have been a focus of policies in recent years. Deforestation has been addressed through an effective permit system. Critics say the government has failed to resist agricultural-industry pressure, but all recent governments have been active in protecting biodiversity.

While New Zealand withdrew from its original commitments under the Kyoto protocol, it recently updated its own climate commitments, pledging to reduce emissions to 30% below 2005 levels by 2030. This includes the offsetting effects of its forestry policies, however.

The country signed a statement at the Paris climate-change conference supporting gradual elimination of fossil-fuel subsides.



Quality of Democracy

With fair and transparent electoral policies and a strong rule of law, New Zealand receives a high overall ranking (rank 7) for the quality of its democracy. Its score on this measure has declined by 0.1 point relative to 2014.

Voting policies are open and inclusive, while recent campaign-finance laws have tightened party-funding regulations. Voting support for citizens with disabilities has improved, and turnout rates have risen. Citizen referendums exist, but are nonbinding. The media are independent, but largely controlled by Australian companies, and increasingly ratings-focused.

Civil rights and political liberties are strongly protected, though state surveillance of New Zealand citizens has become an issue of concern. Anti-discrimination regulations are broad.

Despite the lack of a written constitution, strong courts and a culture of respect for the law afford legal certainty. Corruption is very rare.



Executive Capacity

With a strong focus on interministerial coordination, New Zealand is rated among the top performers (rank 3) in the area of executive capacity. Its score on this measure has improved by 0.1 point since 2014.

A strong government office engages with ministries in a highly collaborative system, and is responsible for centralized strategic planning. A new policy-advisory group provides early input on bill quality. Formal and informal coordination between ministries and with the government office is common.

Impact assessments are mandatory and systematically performed, with a strong quality-assurance component. Societal consultation has improved following a shift to a proportional electoral system, although a trend of passing bills under conditions of urgency, precluding public input, is growing.

Despite minority status, the government has implemented its agenda efficiently. Ministerial compliance is strong, based on a principle of collective responsibility. Local governments have considerable autonomy in setting tax rates.

Executive Accountability

With strong audit and ombuds functions, but media and political-party weaknesses, New Zealand falls into the upper-middle ranks (rank 13) internationally in the area of executive accountability. Its score on this measure has declined by 0.1 point relative to 2014.

Parliamentarians have comparatively slim resources, but ample oversight powers. The highly effective ombuds office is the world’s fourth-oldest.

While disaffection with politics has grown among the young, the broader population’s policy knowledge is generally strong. TV and radio broadcasts offer some high-quality information. A decline in investigative journalism in the electronic and print media has been partially offset by Internet commentary.

Decision-making styles in the traditional political parties vary. The small number of well-organized economic associations are involved in lobbying and policy formation. Other civil-society groups are frequently consulted by decision-makers.
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