Wellbeing in New Zealand

OECD report 2020 (prior to the covid pandemic) stated the following about New Zealand

  • high employment
  • strong levels of social support and trust making
  • outstanding natural beauty

However, not everyone enjoys the same levels of well-being. There are gaps in

  • health,
  • education,
  • employment,
  • income.

The challenge going forward will be to continue improving well-being through building a more productive, sustainable and inclusive economy

Housing

Improving wellbeing through better housing

OECD 2020

  • New Zealand’s housing supply has not kept pace with rising demand
  • Affordability has worsened, particularly for low-income renters.
  • Government delivery of affordable housing through KiwiBuild should be re‑focused towards:
    • enabling the supply of land to developers
    • supporting the development of affordable rental housing
    • expanding social housing in areas facing shortages.
  • The burden of high housing costs has fallen disproportionately on those with lower incomes
  • Most low-income renters those in the bottom quintile of the income distribution spend more than 40% of their disposable income on mortgage and rent. (OECD 2019)
Housing Costs for those whose income is in the bottom 5th
2017 45%
2000 40%
1990 23%
  • Strict regulatory containment policies, which impede densification, need to be replaced by rules that are better aligned with desired outcomes
  • This has recently become topical as a result of Wellington City Council’s Spatial Plan 

House prices and rental costs continue to rise

  • Although skewed by the Auckland rental/housing market (data from 2019) New Zealanders spend the highest share of income on housing among OECD countries

Health

NZ's income distribution is more unequal than the OECD average

Education

Employment and Income distribution

Equity data 2017

Income Inequality Dimension 

2014-2017 Gini coefficient 0= complete equality; 1 = complete inequality

OECD Definition and measure

Income inequality among individuals is measured here by five indicators. The Gini coefficient is based on the comparison of cumulative proportions of the population against cumulative proportions of income they receive, and it ranges between 0 in the case of perfect equality and 1 in the case of perfect inequality.

People in households with low incomes may have more difficulty meeting their material and non-material needs and experience economic hardship. Having insufficient economic resources limits people’s ability to participate in and belong to their community and wider society, which restricts their quality of life.

Income consists of

  • earnings, self-employment and capital income and public cash transfers;
  • income taxes
  • social security contributions

Poverty Gap

2014-2017

OECD Definition and measure

  • The poverty gap is the ratio by which the mean income of the poor falls below the poverty line.
  • The poverty line is defined as half the median household income of the total population.
  • The poverty gap helps refine the poverty rate by providing an indication of the poverty level in a country.
  • This indicator is measured for the total population, as well as for people aged 18-65 years and people over 65.

2014 StatsNZ - Income inequality has widened

  • Between 1988 and 2015, income inequality between households with high incomes and those with low incomes widened

    • In 2015, the disposable income of a high-income household was over two-and-a-half times larger than that of a low-income household.
    • Between 1988 and 2015, the income inequality ratio increased from 2.24 to 2.61.

2014 - StatsNZ the number of households on low incomes as increased

Since 1988, the proportion of the population in households with low incomes has increased

  • In 2015, the proportion of the population with household disposable incomes below 60 & 50% of median income was 18% and 10%, respectively.
  • The proportion of the population with low household disposable incomes increased steadily from 1998 to a peak in 2004