New Zealand


Executive Summary

Low death toll
from recession
New Zealand has weathered the global COVID-19 pandemic relatively well, both in terms of public health and economic performance. As of December 2021, the country had only recorded nine deaths per million population – the lowest such figure in the OECD. New Zealand’s economy also bounced back faster than expected and is projected to exit recession in 2022. The unemployment rate saw a sharp drop in 2021, from a peak of 5.3% in the September 2020 quarter to 3.4% in the September 2021 quarter.
However, the Labour-led government under Prime Minister Jacinda Ardern has been criticized for not using the COVID-19 crisis to tackle major structural policy issues. For one, New Zealand suffers from comparatively high child poverty rates and is ranked near the bottom of UNICEF’s child well-being ratings. While the Ardern administration boosted welfare benefits in the 2021 budget (aimed at lifting between 19,000 and 33,000 children out of poverty), critics have pointed out that these measures do not go far enough.
Housing market
driving inequality
The overheated housing market is a further factor driving social inequality. Average house prices were 33% cheaper in the month before COVID-19 hit than they were at the time of writing; the average house price was $748,111 in March 2020, but has now exceeded $1 million. Ardern continues to ignore calls for a capital gains tax, which – according to its proponents (such as the government’s own Tax Working and the Green Party) – could help to slow down runaway prices.
Insufficient focus on climate issues
In addition, critics have pointed out that the Labour government missed an opportunity to set New Zealand on course toward a low-emission economy. While the 2020 budget mainly pledged funds for weed and pest control, biodiversity enhancement and restoration projects, the 2021 budget funneled very little money toward environmental causes. Based on current policies and public spending priorities, the Climate Action Tracker, which assesses countries’ performance in terms of meeting their Paris Agreement commitments, rates New Zealand as “highly insufficient.”
Structural inequalities persist
What is more, the COVID-19 pandemic has exposed structural inequalities between Māori and non-Māori parts of the population. Not only do Māori continue to be disadvantaged with respect to almost every socioeconomic indicator (e.g., education, income), but they have also been at higher risk of catching COVID-19 than other parts of New Zealand society.
Power concentrated
in executive
These various policy outcomes are influenced by New Zealand’s Westminster-style democracy, which concentrates political power in the executive and features very few veto players. While the New Zealand political system is commonly rated as one of the most democratic in the world, the country struggles with issues of media pluralism. The media market is dominated by (mostly foreign-owned) commercial conglomerates, which place greater emphasis on entertainment than on critical news-gathering.
Efficient, transparent administration
Policy implementation is the responsibility of a highly transparent and efficient bureaucratic apparatus. New Zealand continues to be ranked among the least corrupt countries in the world and performs strongly on a number of other related indicators, such as the availability of and access to government information. In 2021, the government passed a new Public Service Act, which is designed to facilitate cooperation between government departments and agencies.
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