Promising steps on the economy but life expectancy rank has slipped
30 Sep 2010
Six months on from its first release, the NZahead report card on social, economic and environmental measures confirms average performance for New Zealand.
The New Zealand Institute Director, Dr Rick Boven, says “Government has placed an emphasis on improving economic performance and there is much worthwhile discussion, planning and change, but our performance measures report results and a lot remains to be done.”
Half of the 16 important measures have been reassessed based on the availability of new data. No measures have been re-graded upwards and one measure, life expectancy, has been re-graded from a B to a C.
New Zealand’s life expectancy rank has slipped from 11th in the OECD to 14th because Luxembourg, Austria and the Netherlands have increased life expectancy at a faster rate. New Zealand’s rate of improvement in life expectancy is below the OECD average.
It is not clear why New Zealand’s life expectancy improvement has been slower than the OECD average improvement over the last five years. Observed areas of weakness such as disadvantaged population groups with lower life expectancy and adverse obesity trends may contribute, but it is not clear whether these are the factors which distinguish New Zealand’s performance. Expert research is required to diagnose the causes and identify strategies to improve relative performance.
There is new data on household wealth that confirms New Zealand is not performing well on this measure. New Zealand’s position is significantly lower than most of the eight comparator countries the Institute sourced information for, and it is ranked lowest overall. Surprisingly, the USA is also a poor performer with average household wealth not much higher than New Zealand. While the Government’s debt position is a strength, the weaknesses are small holdings of financial assets and high private debt. This reinforces how important the Savings Working Group conclusions will be.
Otherwise, on measures with new data, performance has not changed. Disadvantaged segments of the population remain seriously disadvantaged relative to disadvantaged populations in other OECD countries, and environmental assets remain under pressure.
Dr Boven notes that “In six months these indicators cannot be expected to change dramatically, but it is important to monitor and report results and trends so that there is on-going focus on efforts to make progress.”
Most measures have been updated with text that describes policy changes, research results or activities over the past six months.
Government’s emphasis has been on improving economic performance. It has defined a set of six policy drivers, collectively known as the Economic Growth Agenda, where effort is being focused. Taskforces and Working Groups have been established to address specific issues and opportunities. In addition there is a lot of dialogue and cooperation as people in and stakeholders around Government look for opportunities and build consensus.
Many relatively small-scale economic changes have been made in the areas of focus defined by the Economic Growth Agenda and the initiatives are well-chosen. The ‘aspirational goal’ of matching Australia’s GDP per capita by 2025 has stimulated useful debate and analysis. However, as Dr Boven has observed, there is a widely held view that numerous sensible incremental economic improvements are not likely to be sufficient to achieve the goal.
Planning work continues so it is not possible to judge performance based on what has been announced to date. What is still required is more than an agenda, more than plans, more than improvements. New Zealand needs a strong economic strategy.
A strategy is a plan of action specifically crafted as a map to show how a desirable goal will be achieved. If a sound strategy is implemented, it will ensure the goals targeted are reached. If sound strategies are well communicated and understood then people are able to support changes required and accept short term costs. There is not yet a widely shared understanding of what the economic strategy for New Zealand is.
Efforts to improve social-wellbeing and environment outcomes appear to have lower priority so rapid improvement in these measures cannot be expected. That may be understandable given the immediate importance of improving economic outcomes and the challenges and constraints imposed by the recession and Christchurch earthquake.
Dr Boven says, “A more balanced approach will be required in the medium term or New Zealand will fall further behind on important social and environment measures. And strong social and environment performance is required for long term economic success.”
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For more information please contact:
Dr Rick Boven, Director, The New Zealand Institute, Ph: 09 309 6230
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