Paris, 25 June 2019
New Zealand can improve well-being through better policymaking and reforms to housing and migration policy, OECD says
New Zealand’s economy has stabilised, with solid growth supporting well-being through jobs and incomes. Ongoing
implementation of the government’s new well-being approach to policymaking will offer further opportunities to create a
more sustainable and inclusive economy for all New Zealanders, according to a new report from the OECD.
The latest OECD Economic Survey of New Zealand discusses the challenges of maintaining sound growth and improving well-being for all. The Survey projects growth of
about 2.5% this year and next, against a backdrop of expansionary monetary policy, healthy public finances and tight
labour markets.
The Survey, presented in Wellington by OECD Deputy Secretary-General Ulrik Vestergaard Knudsen and New Zealand Finance Minister Grant Robertson, discusses the need to boost productivity growth, address soaring housing prices and better integrate migrants into the
labour market.
“Life is good for most New Zealanders, with high employment, an exceptional natural environment and strong levels of
social support and trust,” Mr Vestergaard Knudsen said. “But not everyone enjoys the same levels of well-being, with
gaps in health, education, employment, and income. The challenge going forward will be to continue improving well-being
through building a more productive, sustainable and inclusive economy.”
New Zealand’s 2019 Budget used well-being evidence to set priorities, choose among different policy options and foster
greater collaboration among agencies. Steps should now be taken to integrate well-being into other policy advice and
tools, such as regulatory impact assessment and evaluation. Embedding the well-being approach further holds the promise
of making policy advice and implementation more effective, through better targeted actions, a deeper understanding of
trade-offs and more coordinated cross-government action, the Survey said.
To further develop the well-being evidence base, New Zealand can strengthen measurement of natural capital, innovation,
human capital, cultural identity and the integration of indigenous perspectives. It should also ensure sufficient
resources are available for collecting key indicators on a regular basis, and with the granularity needed to track
inequalities.
Despite generally sound macroeconomic and structural policy settings, productivity and earnings are relatively low in
New Zealand. The Survey attributes this to geographical remoteness, insufficient scale, qualification and skills
mismatches, weak competitive pressures and low rates of capital investment and R activity. Policy settings should be adjusted to further support innovation, business dynamism and competition.
The Survey notes that house prices have risen, affordability has dropped and homelessness is high. Reforms to increase
housing supply responsiveness to demand would improve affordability, enhancing well-being. This could include
replacement of regulations that restrict new construction with rules that facilitate densification. Also, local
government infrastructure funding pressures call for new sources of funding, such as special purpose vehicles financed
by targeted rates. Greater priority should be given to new rental housing, including increased provision of social
housing in areas with shortages.
Immigration has increased well-being for both immigrants and most of the New Zealand-born, according to the Survey.
Migration policy could be improved through more effective targeting to address skills and labour shortages while greater
action is needed to ensure that recent immigrants are better integrated into the labour market.
A snapshot of the Economic Survey of New Zealand, with the main conclusions, is accessible at: http://www.oecd.org/economy/new-zealand-economic-snapshot/.
Working with over 100 countries, the OECD is a global policy forum that promotes policies to improve the economic and
social well-being of people around the world.
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