New Zealand

   

Social Policies

#6
Key Findings
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 has fallen by 0.1 point relative to its 2014 level.

The country spends more than any other OECD country on education, with early childhood education and care a particular strength. However, outcomes are on average significantly poorer for Māori and Pasifika students. The healthcare system generally provides high quality services, but is showing signs of being overburdened. Gaps between Māori and non-Māori health outcomes remain substantial.

The income gap has been steadily widening, with high housing costs a growing problem for the poor. An affordable-housing construction program was scrapped, and a new program seeks to provide house-ownership funding support. Child-poverty rates remain a concern. Employment rates for women are well above the OECD average. Domestic violence is a serious problem.

The basic pension policy effectively prevents poverty. Private supplementary pension plans are increasingly popular, but have been criticized for a lack of transparency. The attack on a Christchurch mosque in 2019 shook the country’s sense of security, and resulted in a ban on military-style semi-automatic weapons. The prime minister has also led an international initiative on hate speech.

Education

#4

To what extent does education policy deliver high-quality, equitable and efficient education and training?

10
 9

Education policy fully achieves the criteria.
 8
 7
 6


Education policy largely achieves the criteria.
 5
 4
 3


Education policy partially achieves the criteria.
 2
 1

Education policy does not achieve the criteria at all.
Education Policy
8
New Zealand’s education system performs well on a number of indicators. According to recent OECD Education at a Glance reports, New Zealand is ranked highest in the OECD in terms of educational spending as a percentage of total GDP, national rates of enrollment in early childhood education and care are above the OECD average, the “Not in Employment, Education or Training” (NEET) rate for 18 to 24-year-olds is below the OECD average, and – compared to other OECD countries – New Zealand has an above-average proportion of the population with a bachelor’s degree.

However, at the same time, New Zealand has one of the most unequal education systems in the industrialized world. According to UNICEF’s 2018 Innocenti Report Card, which analyzes the gaps between the highest and lowest performing pupils in OECD countries, New Zealand ranks 33rd of 38 for educational equality across preschool, primary school and secondary school levels. The reading gap at age 10 for New Zealand’s best and worst readers puts the country at 230 points compared to 153 points for the Netherlands, the country with the smallest gap. At age 15, New Zealand’s reading gap is 271, 22% greater than the best performing country.

The inequality of the education system has a strong ethnic component, as education outcomes are generally poorer for Māori and Pasifika (Pacific islands) students. In particular, Māori and Pasifika students are significantly less likely than Pākehā (New Zealanders of European descent) or Asian students to leave the education system with a qualification. While around 71% of Māori stay at school until 17, for Pākehā that rate rises to 85%.

Meanwhile, New Zealand’s tertiary education system stands out by having the second-highest proportion of international students across the OECD. In addition, public expenditure on tertiary education as a percentage of total public spending remains one of the highest in the OECD – even though an increasing proportion of this money goes to students as loans and grants rather than as direct funding to institutions. During the 2017 election campaign, Labour promised fee-free tertiary education for first-year students, with plans for the policy to be extended to three years’ free fees. However, the government reduced funding for programs in 2019 after it was found that the take-up figures had not met projections (lower enrollments at university are also impacted by the size of age cohorts for example). Instead, the government redirected this funding to vocational education reforms, while school donations (from parents) were replaced with increased operational funding from government, and additional funds were provided for learning support and teachers’ salaries.

Citations:
Rutherford, Low enrolments sees $200m clawed back from fees-free scheme, Stuff (https://www.stuff.co.nz/business/112710129/low-enrolments-sees-200m-clawed-back-from-fees-free-scheme)
OECD, Education at a Glance 2019: New Zealand (https://www.oecd.org/education/education-at-a-glance/EAG2019_CN_NZL.pdf)
Free lunches for school kids, Government announces, Stuff (https://www.stuff.co.nz/national/politics/115375000/free-lunches-for-school-kids-government-announces)
UNICEF, Innocenti Report Card (https://www.unicef-irc.org/publications/series/report-card/)

Social Inclusion

#20

To what extent does social policy prevent exclusion and decoupling from society?

10
 9

Policies very effectively enable societal inclusion and ensure equal opportunities.
 8
 7
 6


For the most part, policies enable societal inclusion effectively and ensure equal opportunities.
 5
 4
 3


For the most part, policies fail to prevent societal exclusion effectively and ensure equal opportunities.
 2
 1

Policies exacerbate unequal opportunities and exclusion from society.
Social Inclusion Policy
6
Social inequality is a growing concern in New Zealand. The income gap has been widening steadily: since 2015, the top 20% of New Zealand households have seen their median net worth increase about NZD 131,000 per year, whereas the net worth of the bottom 40% has failed to grow. As a result, the top 20% of New Zealand households collectively now hold about 70% of total household net worth.

The blame for New Zealand’s inequality has been put on the overheated housing market. According to the 2019 Demographia International Housing Affordability survey, house prices in New Zealand are among the most unaffordable in the world. Auckland was ranked as the seventh most unaffordable major city in the world – behind Hong Kong, Vancouver, Sydney, Melbourne, San Jose and Los Angeles. A study by the Ministry of Social Development published in 2018 reveals that New Zealand-wide, more than half of renting households receiving the Accommodation Supplement (benefit to people deemed unable to fully afford rent) are spending more than half their income on housing. The same report also shows that, after taking off the cost of housing, incomes for low-income families with children are still where they were in the 1980s. Alongside this, benefit rates for the unemployed and for sole parents have not kept pace with the cost of living, leading to high rates of child poverty.

The current Labour-led government has taken a number of steps to ease the housing crisis. In 2018, the administration under Jacinda Ardern launched the KiwiBuild policy, which targeted the construction of 100,000 affordable homes over 10 years, with 50% of these in Auckland. However, by mid-2019, the program had only delivered around 250 new homes and was subsequently scrapped in its original form. Instead, the government revealed alternative measures that include NZD 400 million of funding for ownership schemes such as rent-to-buy and shared equity. In addition, the deposit required for government-backed mortgages was reduced by half to 5%.

In August 2018, parliament passed the Overseas Investment Amendment Bill, which is designed to stop foreigners not intending to live in New Zealand from buying most types of homes. However, critics have pointed out that the policy is unlikely to make housing more affordable, given that overseas buyers make less than 3% of national house transfers. In terms of welfare, the new government established an Expert Advisory Group but has yet to implement many of its recommendations. Harsh benefit sanctions have been removed and a small increase in the rate paid has been announced but was not immediately delivered, leading to some disquiet by advocacy groups.

The Māori population is disproportionately affected by socioeconomic inequality. On average, working Māori earn NZD 140 less per week than the average New Zealander. Māori are working the same hours as the New Zealand average, but only 16% of Māori hold an advanced qualification (compared to 30% of the country’s workforce). The Labour government has been criticized for attempting to tackle these issues through universal development schemes rather than allocating funding to Māori-specific programs. For example, the government’s 2019 “well-being” budget aims to reduce child poverty without including specific Māori-targets – despite the fact that Māori children and youth are twice as likely to be in poverty than New Zealanders of European descent.

Citations:
Demographia International Housing Affordability Survey 2019 (http://www.demographia.com/dhi.pdf)
Ministry of Social Development, Household Incomes in New Zealand: trends in indicators of inequality and hardship 1982 to 2017 (https://www.msd.govt.nz/about-msd-and-our-work/publications-resources/monitoring/household-incomes/index.html)
Nadkarni, Who does the foreign buyer ban affect and will it make housing more affordable?, Stuff (https://www.stuff.co.nz/business/106307986/explainer-who-does-the-foreign-buyer-ban-really-affect)
New Zealand scraps “overly ambitious” plan to tackle housing crisis, The Guardian (https://www.theguardian.com/world/2019/sep/04/new-zealand-scraps-overly-ambitious-plan-to-tackle-housing-crisis)
Parahi, Labour’s Māori ministers have achieved little for their people – so far, Stuff (https://www.stuff.co.nz/national/politics/112048764/labours-mori-ministers-have-achieved-little-for-their-people–so-far)
Stats NZ, Wealth of top 20% rises by $394,000 (https://www.stats.govt.nz/news/wealth-of-top-20-percent-rises-by-394000)
Walter, Fact check: Disparities between Māori and Pākehā, Stuff (https://www.stuff.co.nz/national/politics/101231280/fact-check-disparities-between-mori-and-pkeh)

Health

#1

To what extent do health care policies provide high-quality, inclusive and cost-efficient health care?

10
 9

Health care policy achieves the criteria fully.
 8
 7
 6


Health care policy achieves the criteria largely.
 5
 4
 3


Health care policy achieves the criteria partly.
 2
 1

Health care policy does not achieve the criteria at all.
Health Policy
8
New Zealand’s public healthcare policies achieve high-quality and inclusive healthcare for most citizens but, similar to other OECD countries, cost efficiency and long-term public spending pressures remain an issue. The OECD points out that the largest projected long-term public spending pressure is healthcare, which is expected to jump from 6.2% of GDP in 2015 to 9.7% of GDP by 2060, owing to both aging demographics and the expected increase in expensive new treatments.

The public healthcare system is already showing signs of being overburdened. Reports of chronically understaffed hospitals abound, large numbers of specialist referrals are declined because of a lack of resources and waiting lists for surgical procedures have become a serious issue. Mainly due to lengthy waiting lists in the state healthcare system, a large number of New Zealanders (around 1.37 million) now have private “queue jumping” health insurance. In recent years, however, premiums have increased continuously, thereby fueling income-related inequality in healthcare.

During the 2017 election campaign, the three parties that now represent the government announced plans to improve primary care. In particular, Labour committed to increasing the intake to 300 general practitioner training places per year and to initiate a review of primary care funding. In May 2018, the new government announced a review of the health and disability system with a report due to be published in 2020. Health was the main winner in the government’s first, cautious budget, goals for which included an NZD 1.52 billion increase in health spending for the 2018–2019 year (the 2017 National Party government had increased funding by NZD 825 million). The majority of the new funding is for capital investments in building and restoring hospital buildings (NZD 750 million) and boosting the support fund for District Health Boards in deficit (extra NZD 100 million). Other measures included extending coverage of free doctors’ visits and prescriptions to children up to the age of 13 years (resulting in free visits to an estimated 56,000 extra children), and extending access to low-cost doctors’ visits for those low-income New Zealanders holding Community Services Cards. In the 2019 “well-being” budget, mental health received the biggest funding and investment boost on record. Of a total of NZD 1.9 billion, half a billion is earmarked for the “missing middle,” that is, the mild-to-moderate anxiety and depressive disorders that do not require hospitalization.

A particular challenge is the persistent gap in health status between Māori and non-Māori parts of the population. For one, Māori life expectancy is lower than that for non-Māori, according to 2013 Ministry of Health figures. Life expectancy at birth was 73.0 years for Māori males and 77.1 years for Māori females; it was 80.3 years for non-Māori males and 83.9 years for non-Māori females. In addition, the 2017–2021 Ministry of Health and Addiction Workforce Action Plan finds that, while Māori make up approximately 16% of New Zealand’s population, they account for 26% of all mental health service users.

Citations:
Health Central NZ. 2018. Health Budget 2018 at a glance: winners, losers & the “wait & sees.” 18 May 2018. https://healthcentral.nz/health-budget-2018-at-a-glance-winners-losers-thewait-sees/
Jones and Akoorie, Unfair care: What’s going wrong in the health system?, New Zealand Herald (https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12174249)
The Treasury, Budget 2019 (https://treasury.govt.nz/publications/budgets/budget-2019)
Walter, Fact check: Disparities between Māori and Pākehā, Stuff (https://www.stuff.co.nz/national/politics/101231280/fact-check-disparities-between-mori-and-pkeh)

Families

#11

To what extent do family support policies enable women to combine parenting with participation in the labor market?

10
 9

Family support policies effectively enable women to combine parenting with employment.
 8
 7
 6


Family support policies provide some support for women who want to combine parenting and employment.
 5
 4
 3


Family support policies provide only few opportunities for women who want to combine parenting and employment.
 2
 1

Family support policies force most women to opt for either parenting or employment.
Family Policy
8
The 2019 Women in Work Index (published by consultancy firm PwC) rates New Zealand third in the OECD, behind Iceland and Sweden. Employment rates for women are well above the OECD average – even though mothers with young children have lower employment rates and women are also more likely to work part-time than in most OECD countries. The median gender labor earnings gap is significantly lower than the OECD average (7.2% vs. 13.9%). However, a research report commissioned by the Ministry for Women finds that the wage gap between men and women widens to 12.5% when they become parents. When women become mothers, they are less likely to be employed and, if they do work, they work fewer hours and have lower earnings – even 10 years later. Mothers earn 4.4% less on average than non-mothers, with the gap widening the longer they are off not in employment.

A number of family support policies have been passed under the current Labour-led government that are designed to enable mothers to decide freely whether they want to return to employment. Most importantly, a new Families Package has been rolled out since mid-2018. Its provisions include: increasing the rate of paid parental leave from 22 to 26 weeks from July 2020; the introduction of a Winter Energy Payment for beneficiaries including pensioners; a weekly NZD 60 payment to low and middle-income families with babies and toddlers; reinstating the Independent Earner Tax Credit; and increasing benefits for orphans, unsupported children and foster careers. When the package is fully implemented in 2020, it is estimated that 384,000 families will benefit.

In the government’s 2019 “well-being” budget, measures to combat family violence received a record investment of NZD 320 million, in a bid to tackle the New Zealand’s entrenched family and sexual violence statistics, which see the police respond to a domestic violence incident every four minutes. The budget also dedicates NZD 1.1 billion to child poverty measures, aiming to lift 70,000 children out of poverty in low-income households by 2020/21 and 120,000 by 2027/28.

A Pay Equity Working group has been established to find a mechanism to reduce the gender pay gap which sits stubbornly at 9% but is considerably wider for some groups of women. In the public service, the gender pay gap for Pacific women is 21%. The Ministry for Women has introduced an online tool to assist policy makers attend to gender differences in their policy design and budget bids (titled Bringing Gender In).

Citations:
Stuff. 2018. Govt’s families package takes effect: ‘Step in the right direction.’ https://www.radionz.co.nz/news/political/360801/govt-s-families-package-takes-effect-step-in-the-right-direction
Ministry for Women, Empirical evidence of the gender pay gap in New Zealand (https://women.govt.nz/documents/empirical-evidence-gender-pay-gap-new-zealand)
PwC, Women in Work Index 2019 (https://www.pwc.co.uk/economic-services/WIWI/pwc-women-in-work-2019-final-web.pdf)
The Treasury, Budget 2019 (https://treasury.govt.nz/publications/budgets/budget-2019)

Pensions

#10

To what extent does pension policy realize goals of poverty prevention, intergenerational equity and fiscal sustainability?

10
 9

Pension policy achieves the objectives fully.
 8
 7
 6


Pension policy achieves the objectives largely.
 5
 4
 3


Pension policy achieves the objectives partly.
 2
 1

Pension policy does not achieve the objectives at all.
Pension Policy
7
New Zealand’s pension system is tax-based. There is no retirement age, but 65 is the current age of eligibility for New Zealand Superannuation. The level of NZ Super payments is reviewed annually, taking into account inflation and average wages. Any eligible New Zealander receives NZ Super regardless of how much they earn through paid work or what assets they own. While universally accessible, NZ Super is one of the least generous pensions relative to the working wage in the industrialized world: New Zealand superannuitants get just 43% of the average working wage; the average across the OECD is 63%. However, the system operates as a form of universal basic income and is relatively efficient: just 10.6% of over 65s in New Zealand are considered to be living in poverty compared to the OECD average of 12.5% – even though among those 76 and over, 15% are in poverty compared to 13.9% across the OECD. Historically the assumption was that most New Zealanders would be living in their own mortgage-free house by the time of retirement. This is no longer a realistic assumption, hence the need for more personal savings to supplement the universal payment.

Due to demographic changes, the cost of NZ Super is projected to rise from NZD 13 billion in 2016 to NZD 76 billion by 2050. The percentage of GDP that goes toward paying for NZ Super will increase from about 4% in 2001 to 7.1% in 2049 and 7.9% by 2059. Nevertheless, the recent review of retirement income policy recommends retaining the government’s scheme and has resisted recommending the introduction of a raised age of retirement or a means test.

To encourage private savings as a means to relieve the pressure on the state pension system, New Zealand introduced KiwiSaver in 2007 – a publicly subsidized private pension plan offered on a voluntary basis. KiwiSaver has come under public scrutiny because of a perceived lack of transparency around account fee charges. Another public debate concerns where the KiwiSaver funds are invested. Demand for more ethical investment options from KiwiSaver providers has been an ongoing refrain. However, despite these drawbacks, KiwiSaver is a popular savings option for New Zealanders, although most continue to view the universal national superannuation as likely to be their primary source of income in retirement (RRIP 2020)

Citations:
Bagrie, New Zealand has no choice but to increase the pension age, Stuff (https://www.stuff.co.nz/business/113995068/new-zealand-has-no-choice-but-to-increase-the-pension-age)
Parker, A super future: Are we on track to pay for our pensions?, New Zealand Herald (https://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=12028887)
Commission for Financial Capability (2020) https://cffc-assets-prod.s3.ap-southeast-2.amazonaws.com/public/Uploads/Retirement-Income-Policy-Review/2019-RRIP/CFFC-Review-of-Retirement-Income-Policies-2019.pdf

Integration

#2

How effectively do policies support the integration of migrants into society?

10
 9

Cultural, education and social policies effectively support the integration of migrants into society.
 8
 7
 6


Cultural, education and social policies seek to integrate migrants into society, but have failed to do so effectively.
 5
 4
 3


Cultural, education and social policies do not focus on integrating migrants into society.
 2
 1

Cultural, education and social policies segregate migrant communities from the majority society.
Integration Policy
9
New Zealand has long been a prime destination for immigrants. In the 2013 census, more than a million people reported that they were born overseas, just under a quarter of New Zealand’s population of almost four and a half million. The overseas-born figure is 37% in Auckland, the country’s biggest city, making it as diverse as London on this measure.

Integration of immigrants is promoted through settlement support. There is more intensive support for refugees, but other migrants also have access to high-quality information services (online and through the Citizens Advice Bureau network) as well as ongoing language and employment programs. New legislation was enacted in 2015 to ensure that migrant workers had the same employment rights as all other workers in New Zealand.

Data from the New Zealand General Social Survey reflects the country’s willingness to promote integration. Immigrants are less likely to claim benefits, more likely to be employed, and their children have better education outcomes than native born New Zealanders. There is relatively little ethnic or migrant clustering, and where concentrations do occur there is no indication of high unemployment. Some 87% of migrants say they feel they belong to New Zealand. Surveys show New Zealanders, too, have a generally positive view of migrants, and value the contribution they make to the economy and the cultural diversity they bring.

Citations:
Immigration Amendment Act 2015: http://www.immigration.govt.nz/migrant/general/generalinformation/news/immigrationamendmentact2015.htm (accessed October 24, 2015).
Ipsos, What New Zealanders think of immigration (http://www.scoop.co.nz/stories/PO1610/S00186/what-new-zealanders-think-about-immigration.htm)
NZ Stats, New Zealand General Social Survey (http://archive.stats.govt.nz/browse_for_stats/people_and_communities/well-being/nzgss-info-releases.aspx)

Safe Living

#10

How effectively does internal security policy protect citizens against security risks?

10
 9

Internal security policy protects citizens against security risks very effectively.
 8
 7
 6


Internal security policy protects citizens against security risks more or less effectively.
 5
 4
 3


Internal security policy does not effectively protect citizens against security risks.
 2
 1

Internal security policy exacerbates the security risks.
Internal Security Policy
8
New Zealand has traditionally had a remarkable internal security record. However, the terrorist attack on a Christchurch mosque in March 2019, when a right-wing extremist killed 51 people and injured 49, shook the country’s sense of security. The government responded to the politically motivated mass shooting by passing a new gun lawn in April that bans military-style semi-automatic weapons and parts that can be used to assemble prohibited firearms. More than NZD 208 million have been set aside to for a gun buy-back scheme, compensating owners for up to 95% of the original price of their weapons. Police estimate that around 14,300 military style semi-automatic weapons are covered by the new legislation. The government also announced that NZD 17 million would be spent to establish a dedicated investigative team to find and prosecute terrorist and extremist content online. Prime Minister Jacinda Ardern has also been leading on an internationally coordinated initiative to tackle online hate speech.

While government expenditures for public order and safety are relatively high and growing, crime continues to be a salient issue for New Zealanders. While recent statistics show a considerable decline in criminal offenses, the New Zealand Crime & Victims Survey published at the end of 2018 reveals that only a fraction of crimes (around 25%) are reported to police and recorded officially. Burglary, harassment and fraud were the most common crimes committed in New Zealand, and Māori people were more likely to be victims of crime, with 37% of indigenous respondents reporting being the victim of a criminal incident in the past year (the national average is 29%). Men and women were equally likely to be victims of crime (at 29% each), but in the 200,000 sexual assaults and 190,000 incidents of domestic violence, 71% of victims were women.

Citations:
BBC, Christchurch attack: New Zealand launches gun buy-back scheme (https://www.bbc.com/news/world-asia-48700495)
Manch, Largest-ever New Zealand crime survey shows 77 per cent of ‘shadow crime’ unreported, Stuff (https://www.stuff.co.nz/national/crime/112665834/largestever-new-zealand-crime-survey-shows-77-per-cent-of–shadow-crime-unreported)
RNZ, Government announces $17 million to target violent extremist content online (https://www.rnz.co.nz/news/political/400957/government-announces-17-million-to-target-violent-extremist-content-online)

Global Inequalities

#11

To what extent does the government demonstrate an active and coherent commitment to promoting equal socioeconomic opportunities in developing countries?

10
 9

The government actively and coherently engages in international efforts to promote equal socioeconomic opportunities in developing countries. It frequently demonstrates initiative and responsibility, and acts as an agenda-setter.
 8
 7
 6


The government actively engages in international efforts to promote equal socioeconomic opportunities in developing countries. However, some of its measures or policies lack coherence.
 5
 4
 3


The government shows limited engagement in international efforts to promote equal socioeconomic opportunities in developing countries. Many of its measures or policies lack coherence.
 2
 1

The government does not contribute (and often undermines) efforts to promote equal socioeconomic opportunities in developing countries.
Global Social Policy
9
New Zealand has been neglecting its responsibilities to promote equal socioeconomic opportunities in developing countries. Despite a longtime global commitment to lift its aid spending to 0.7% of gross national income (GNI), New Zealand’s spending as a proportion of GNI dropped from 0.3% in 2008 to 0.25% in 2016. In 2018, the government announced an NZD 714.2 million allocation to the Official Development Assistance (ODA) fund, which will bring New Zealand’s ODA to 0.28% of GNI by 2021. The allocation is heavily prioritized toward the South Pacific: around 60% of New Zealand’s total aid spending goes to its small-island neighbors. This increase in ODA comes amid concerns about China’s growing influence in the region.

New Zealand is a signatory to a number of multilateral free-trade agreements that include developing countries, such as the ASEAN-Australia-New Zealand free trade agreement (AANZFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In addition, New Zealand has ratified the South Pacific Regional Trade and Economic Co-operation Agreement (SPARTECA) – a non-reciprocal trade agreement in which New Zealand (together with Australia) offers preferential tariff treatment for specified products that are produced or manufactured by the Pacific Islands Forum countries. Partly due to New Zealand’s commitment to free trade, the Heritage Foundation – a conservative U.S. think tank – ranks it third in the 2019 Index of Economic Freedom, behind only Hong Kong and Singapore.

Citations:
Kirk, Budget 2018: “Pacific reset” will increase foreign affairs funding to $1b over four years, Stuff (https://www.stuff.co.nz/national/politics/103738729/budget-2018-1b-for-foreign-affairs-massive-boost-to-pacific-aid-and-a-new-embassy?rm=m)
New Zealand Customs Service, Free Trade Agreements (https://www.customs.govt.nz/business/tariffs/free-trade-agreements/)
The Heritage Foundation, 2019 Index of Economic Freedom (https://www.heritage.org/index/)
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