Purpose
The trends in indicators of economic inclusion and social mobility in Aotearoa New Zealand are not widely understood. This includes understanding how trends in economic inclusion and social mobility impact on individuals, different population groups and wider society, and how these impacts link to productivity and economic performance. In addition, some trends in New Zealand differ from other countries, such as the United Kingdom and United States. A robust, authoritative narrative about the New Zealand situation is lacking from public discourse.
A key gap in the existing New Zealand evidence is measurement and analysis of persistent disadvantage, and its dynamics across lifetimes and generations. Available evidence points to significant and growing disadvantage in the bottom income deciles, particularly in the context of rising housing costs. Covid-19 may exacerbate these trends. Children growing up in these households face the prospect of entrenched disadvantage.
The inquiry will focus on the persistence of disadvantage, which will bring together the two concepts of economic inclusion and social mobility.
The purpose of this inquiry is to:
- generate new insights about the dynamics and drivers of persistent disadvantage, and the incidence/impacts across different population groups, including social and economic factors;
- develop recommendations for actions and system changes to break or mitigate the cycle of disadvantage (both within a person’s lifetime and intergenerationally); and
- help raise public awareness and understanding of trends in economic inclusion and social mobility (with a focus on persistent disadvantage) in New Zealand.
The inquiry task
There have been many previous reviews relating to improving the wellbeing of New Zealanders. Although sector-specific policies have received attention on many occasions, there has been much less investigation into the role of the public management system itself in addressing persistent disadvantage.
The Productivity Commission (the Commission), in its function as an independent advisor to Government and its ability to look beyond individual sector/agency work, is well placed to fill this gap.
Alongside being tasked to generate new insights about the dynamics and drivers of persistent disadvantage, the terms of reference for this inquiry point to developing “actions and system changes to break or mitigate the cycle of disadvantage (both within a person’s lifetime and intergenerationally)”.
As a result, and consistent with what we heard from submitters, this inquiry took a system-wide and whole-of-government perspective to identify system shifts and changes to break the cycle of persistent disadvantage. Persistent disadvantage cannot be fixed overnight or by a few disconnected actions. A system problem demands a systemic response.
This final report brings together our findings and recommendations, building on the findings in our interim report on the nature and causes of persistent disadvantage, and focusing on recommended solutions. It should be read alongside our quantitative report, A quantitative analysis of disadvantage and how it persists in Aotearoa New Zealand (NZPC, forthcoming), which provides in-depth empirical findings.
Methodology
Our approach
As well as drawing on many valuable submissions, meetings, reports, commissioned research and our own previous inquiries, the Commission drew from earlier Royal Commissions on social inclusion, Treasury’s Living Standards Framework, the All-of-Government Pacific Wellbeing Strategy, and He Ara Waiora – a tikanga framework that conceptualises a Māori perspective on wellbeing. We worked with Treasury and Ngā Pūkenga (a group of Māori thought leaders), to adapt He Ara Waiora, using mauri ora (2) as the central concept to describe the wellbeing and productivity outcomes we are seeking for New Zealanders in this inquiry (3). According to Durie (2017) mauri ora is a state of being healthy, vital and in balance. The opposite of mauri ora is mauri noho – “languishing” or “sitting dormant” – in other words, disadvantage.
Persistent disadvantage and social inclusion
We define persistent disadvantage as disadvantage that is ongoing, whether for two or more years, over a life course, or intergenerationally. It has three domains:
- being left out (excluded or lacking identity, belonging and connection);
- doing without (deprived or lacking the means to achieve their aspirations); and
- being income poor (income poverty or lacking prosperity).
We define social inclusion as being when all New Zealanders live fulfilling lives – where individuals, their families, whānau and communities have a strong sense of identity; can contribute to their families and communities; and have the things they need to realise their aspirations and nourish the next generation.
Our findings and recommendations are developed and presented throughout this report, with a combined list provided at the end of this report.
Footnotes:
(2) We acknowledge the breadth of this concept that has no direct English translation. Durie (2017) used “flourishing” to describe mauri ora and “languishing” for mauri noho.
(3) In formulating our mauri ora approach, we were mindful of the tensions inherent in adapting a tikanga framework, understanding there is an ongoing preference for He Ara Waiora to be applied as a whole. We appreciate the support and guidance of members of Ngā Pūkenga and the Treasury to adapt the framework for our inquiry. We encourage others to also seek guidance in their application of He Ara Waiora.
Key Results
Barriers and protective factors exist
A central finding of this inquiry is that people experiencing disadvantage and those trying to support them are constrained by powerful system barriers. Siloed and fragmented government and short-termism reflect well-known challenges that the public management system has been grappling with for decades. Outside the public management system, power imbalances, discrimination, and the ongoing impact of colonisation form part of the economic and social context and create the main drivers for both advantage and disadvantage in Aotearoa New Zealand.
Factors that protect against disadvantage include adequate income, housing, health, and social connection; cultural identity and belonging; knowledge and skills; access to employment; stable families; and effective government policies and supports.
For many people, disadvantage does not persist. People can get themselves through a temporary period of disadvantage by drawing on their own resources, accessing support from family and friends and the local community, and from the Government.
In the absence of effective support, temporary disadvantage can persist and compound, trapping people within multiple complex disadvantages.
Wellbeing, assumptions and voice of future generations
Although advances in wellbeing approaches are a good start, many of the key assumptions underlying Aotearoa New Zealand’s policy and public management system settings are hampering the implementation of a fully integrated wellbeing approach. The current wellbeing approach leans heavily on measurement and lacks integration into the public management system. Aotearoa New Zealand has been at the forefront of international wellbeing approaches, but other countries are now operationalising wellbeing better.
Accountability and learning systems
Current accountability settings constrain more innovative and effective ways of addressing persistent disadvantage. We identify three critical gaps in the accountability system:
- weak direct accountabilities for ministers and the public service in addressing persistent
disadvantage and the needs of future generations; - the neglect of te Tiriti o Waitangi (te Tiriti) as a foundational constitutional document; and
- settings that constrain ongoing learning and more innovative and effective ways of addressing
persistent disadvantage, including relational, collective and trust-based approaches.
Evidence shows locally led, whānau-centred and centrally enabled approaches can provide more effective assistance to people and families experiencing persistent disadvantage. However, these approaches are typically short term and under-resourced, and those that exist often struggle to meet the level of need and aspiration within communities.