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New Zealand: Families in homes a step toward a better economy

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Lincoln: A growing economy does not always mean a nation is doing well. Measuring wellbeing, and implementing policies to address that, fills that gap.

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The New Zealand economy has been booming.

Economic growth was 6 per cent in 2021 and 2.4 per cent in 2022. Its employment rate among 15-64 year-olds is 80 per cent, the third highest of the 38 OECD countries.

Despite this, times don't feel great for Sarah.

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Sarah is a young person living in Christchurch, the largest city in the South Island.

She is one of 315 children whose families are living in the city's emergency housing.

Her family has been living in a motel room for more than a month after rising prices meant they could not keep up with rent payments.

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Sarah's family wants to move into transitional housing as a step towards having their own home again, but there is a long queue in Christchurch. Families are staying in the city's transitional houses for about six months on average. It is supposed to be no more than 12 weeks.

The Child Poverty Action Group monitors the experience of youngsters like Sarah for all of New Zealand. In May 2023, it published a report on how families who receive social security benefits are doing.

It showed that couples with two children, living in a private rental, face an income deficit to the tune of NZD 300 a week.

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When children do not have enough economic resources to develop their potential, there are long-term impacts. Not just for themselves, but for the country. The Dunedin Longitudinal Study, for example, has shown how adverse experiences and certain attributes in childhood can predict poor health outcomes and socially damaging behaviour in later life.

Sarah's story is a challenge to the old-style thinking that economic policies should be judged simply by how fast the economy is growing. Economies can grow in ways that leave large numbers of families unable to access good housing or decent work.

A focus on economic growth for its own sake is creating other damage. Scientists have been warning for a long time that human economic activities are changing the earth's climate and New Zealand is not immune, experiencing two 'unprecedented' extreme weather events — record-breaking floods in Auckland and Cyclone Gabrielle — within a few days of each other in February 2023.

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The combined damages bill is estimated to be up to NZD 14.5 billion.

Countries are thinking more carefully about what a wellbeing economy looks like. The New Zealand government accepts this principle. Since 2019, its Minister of Finance has prepared what he calls wellbeing budgets. The Fifth Wellbeing Budget was presented to Parliament on 18 May 2023.

A wellbeing budget begins by selecting priority objectives based on an analysis of wellbeing needs. There are five in the 2023 Budget. The first priority is the climate crisis. The budget aims to support New Zealanders transition to a climate-resilient, sustainable and low-emissions economy.

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Another objective is to improve health outcomes, with a focus on the mental wellbeing of young people. A third priority focuses on preparing people and businesses for the future of work, while the fourth objective aims to lift incomes, skills and opportunities of Maori and Pacific peoples.

The fifth priority is to reduce child poverty and improve child wellbeing. This includes better access to affordable, safe and stable housing.

Sarah's story has been heard.

The government aims to halve child poverty by 2027/28 compared to 10 years earlier — an ambitious target. Official data record there have been improvements. Increases in income support and the statutory minimum wage have made a difference.

However, more work is needed if we want to meet the ten-year targets. Housing remains a pressing issue.

The Housing Register is a waiting list for public housing. There were 24,080 applicants on the register in March 2023, with 92 per cent having a severe and persistent housing need.

New Zealand is not the only country pursuing a wellbeing economy. WEGo is a partnership of Scotland, Iceland, Wales, Finland, Canada and New Zealand, whose leaders have committed to sharing their expertise and policy lessons as they grapple with the challenge of expanding wellbeing for people and planet.

The New Zealand experience shows that countries can design economic policies to focus on important wellbeing issues, such as climate change and child poverty. New Zealand's Wellbeing Budgets illustrate how the government's targets and policies can be open to public scrutiny.

The New Zealand experience also shows there are no simple answers to the big economic challenges facing our wellbeing and the wellbeing of future generations.

New Zealand's Wellbeing Budgets are important steps in a new direction, but there will be more to discover as countries journey towards a wellbeing economy.

* Sarah is a composite character based on several persons engaged with community housing providers in Christchurch, New Zealand (360info.org)

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