Purpose
This report uses non-income measures (NIMs) to more directly examine the material wellbeing of New Zealand families and households.
NIMs focus on the actual day-to-day living conditions of households in terms of the basics of food, clothing, accommodation, heating, and transport, and more widely in terms of their ability to maintain or replace broken household appliances, purchase desirable non-essentials, cope with unexpected demands on the household budget, and so on. They allow a ranking of households using a more direct measurement approach compared with the indirect approach using household income. The indices used to do this are described in Section B.
The NIMs Material Wellbeing Report sits alongside the Household Incomes Report: together they give a comprehensive account of the relativities between different groups and of trends over time. MSD’s June 2021 Child Poverty Report (Perry, 2021) gives a more detailed account for children.
The report also shows where New Zealand ranks internationally using material hardship or deprivation measures, a more robust approach to international comparisons of low material wellbeing than using household incomes.
Non-income measures are sometimes called non-monetary indicators (NMIs). They refer to the same items and measures.
The Household Incomes Report (HIR) is paused at present while Stats NZ resolves some income data issues that can have an impact on some of the statistics usually reported in the HIR. Stats NZ expects to have the issues sorted by December 2021. The next HIR is scheduled for the third quarter of 2022. See the box at the end of Section B for further information.
Methodology
Each NIM can provide valuable information in its own right, but the focus of the report is on selected NIMs used together in two types of index:
- material hardship or deprivation indices – one from Eurostat as used by the EU (EU-13) and one from MSD’s own work (DEP-17)
- the material wellbeing index (the MWI) which allows comparisons across the spectrum from low to high material living standards, rather than just focussing on the low end.
The analysis in the report uses data from MSD’s 2008 Living Standards Survey (LSS) and Stats NZ’s Household Economic Survey (HES) which has included a suite of NIMs since 2006-07. The income issues noted in footnote #2 below do not impact on NIMs as they are all collected directly in the interviews for the survey.
The MWI is a revised version of the prototype ELSI measure (Economic Living Standards Index) developed by MSD in 2002.
Key Results
Using the EU-13 index, 10% of the New Zealand population lived in households with 5 or more enforced lacks, ranking New Zealand alongside the UK, Belgium, Ireland and Poland, around the median for the European countries reported on below.
Older New Zealanders have a much lower material deprivation rate (4%) than their counterparts in the bulk of European countries (Figure C.2 and Table C.4). New Zealand ranks among those with the lowest rates (Netherlands, Austria, Switzerland, Denmark Finland and the UK). Even richer western European countries such as Germany (6%) and France (10%) have higher rates than New Zealand. Latvia (27%), Greece (29%) and Lithuania (33%) report much higher rates, similar to their overall population rates. In contrast, New Zealand’s 65+ rate (4%) is much lower than the overall population rate (10%).
The New Zealand rate for those aged under 65 (11%) is a little higher than for the whole population (10%) as the 65+ rate is much lower than the average rate. The ranking of countries and New Zealand’s place in the rankings are very much the same for the under 65s and the whole population.
Using the EU-13 index, 14% of New Zealand children live in households that report five or more of the thirteen enforced lacks. In contrast to the comparisons for those aged 65+, New Zealand’s child material hardship rate is much higher than for countries like the Netherlands, Norway, Sweden, Finland, Austria and Switzerland (5-8%). For children, New Zealand ranks alongside Belgium, Portugal, Ireland, the UK, France and Spain in the higher-hardship-rates zone for the old EU (14-16%).
Using the EU-13 index, 34% of sole-parent households report five or more of the thirteen enforced lacks. The New Zealand rate is similar to Ireland (32%) and the UK (35%), but well above the EU median (25%).
In New Zealand, around two in three sole-parent families live in households on their own, and one third live with other adults. The above data for sole-parent households is about the two in three noted above.
Using the EU-13 index, 22% of New Zealand under-65 adults living on their own report five or more out of the thirteen enforced lacks. The New Zealand hardship rate is similar to that for Ireland and Portugal (21%), and Belgium (23%), but above the European median (16%).
New Zealand’s reported overall material deprivation rate and ranking remained much the same for 2018 as for 2008 (11%, around the median for the 27 countries, and similar to the UK, Ireland and Belgium).
The rate for older New Zealanders was still low in 2018 at around 4%, among the best in Europe.
The material hardship rate for children improved a little in the decade, from around 18% to 14% on this measure, similar in 2018 to Italy, Belgium and the UK, and above the median for the 27 countries (11%). Because the rate for older New Zealanders is so low, the New Zealand child rate is relatively high compared to the overall population rate, fifth highest of the 27 countries reported on for 2018, much the same ranking as 10 years ago (see Figure C.5)
The overall relativities are clear and well established: older New Zealanders have much lower hardship rates than younger New Zealanders (aged 0-17 yrs), with rates similar to those of couple-only ‘working age’ households (~3-5% over many years).
The rate for sole-parent households rose from around 35% pre-GFC to 45% at its highest and in 2020 was down to around 30%.