New Zealand


Policy Performance


Economic Policies

Despite New Zealand’s small size and geographic remoteness, the country scores well (rank 11) in terms of economic policy. Its score on this measure has risen by 0.2 points relative to 2014.

The government has pursued a cautious, incremental approach prioritizing debt reduction. Nevertheless, growth has been moderate and stable over the last few years, at around 3%. Debt levels are moderate by OECD standards, showing steady small declines thanks to years of modest budget surpluses.

Unemployment rates have fallen to under 5%, the lowest rate since the 2008 crisis. The once-problematic drain of highly skilled workers to Australia has stopped. Labor-market policies have helped reduce youth-unemployment rates, but indigenous-community unemployment remains troublesome.

Taxes are comparatively low. Tax reductions were delayed in pursuit of a budget surplus, while a property tax imposed to control speculation was retained. R&D policy is a weakness, but private-sector spending is rising. A visa aimed at temporary workers was changed to require them to leave the country before applying for a new visa for a different position.

Social Policies

With high educational attainments and a strong health system, New Zealand falls into the top ranks internationally (rank 6) with regard to social policies. Its score on this measure is unchanged relative to its 2014 level.

While the country’s PISA scores are high, educational performance is declining, with indigenous children in particular struggling. The new Labour government introduced free tertiary education for first-year undergraduates. The health care system is generally of a high quality, and Maori health outcomes are improving.

Social-security benefits are comprehensive, but high housing costs are a growing problem for the poor. The new government has launched an affordable-housing construction program. Child-poverty rates remain a concern. Women’s labor-market participation rates are still well below that of men, but paid parental leave has been extended to 26 weeks.

Pension policies prevent poverty. Private pension plans are increasingly popular, but have been criticized for a lack of transparency. Integration policy is largely successful, with a recently implemented visa program focusing on skilled immigration. Net immigration figures have risen sharply.

Environmental Policies

With a strongly agricultural economy, New Zealand falls into the lower-middle ranks (rank 28) in terms of environmental policy. Its score on this measure is unchanged relative to its 2014 level.

A 2017 review of New Zealand’s environmental policies criticized the country for prioritizing growth over environmental quality. Rising greenhouse gas emissions and declining fresh water quality were key concerns. However, deforestation has been addressed through an effective permit system, and all recent governments have been active in protecting biodiversity.

The county has the highest share of emissions from agriculture within the OECD. Critics say the National-led government failed to resist agricultural-industry pressures, particularly with regard to dairy farmers.

The government ratified the Paris climate agreement in late 2016, pledging to reduce emissions to 11% below 1990 levels by 2030.



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 0.2 points relative to 2014.

Voting policies are open and inclusive. Campaign financing is monitored by an independent commission, but private funding is criticized as being insufficiently transparent. A new media-law interpretation may allow political attack ads to be run by anyone with sufficient funds. Citizen referendums exist, but are nonbinding.

The media sector is largely controlled by Australian companies, with a proposed merger between two already-dominant figures blocked in 2017. Civil rights and political liberties are strongly protected. A new security-services law allows monitoring of New Zealanders if national security issues are at stake. 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. Formal and informal coordination between ministries and with the government office is common. Unlike its predecessor, the Labour-led government is a formal coalition, which changes, but does not diminish, the official character of informal coordination.

Impact assessments are mandatory and systematically performed, with a strong quality-assurance component. Societal consultation is robust, although a trend of passing bills under conditions of urgency, precluding public input, was evident under the previous administration.

Ministerial compliance is strong, based on a principle of collective responsibility. Labour cabinets are elected by all party parliamentary members rather than selected by the prime minister alone. After strongly opposing aspects of the Trans-Pacific Partnership trade agreement, the incoming government endorsed the project following negotiation of several amendments.

Executive Accountability

With strong audit and ombuds functions, but media and political-party weaknesses, New Zealand falls into the upper-middle ranks (rank 13) with regard to executive accountability. Its score on this measure is unchanged relative to its 2014 level.

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

The population’s policy knowledge is generally strong, with children showing an above-average interest in politics. 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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