The Kiwis resilience report - are you ready?

DELOITTE

Deloitte, in partnership with Victoria University of Wellington’s School of Government, looks at the challenges we all face and investigates what policies can be developed now to ensure Kiwis stay fit for the future.

Income support for some households, and child benefits for all would help Kiwis face future challenges. These are two proposals in a new report that argues building up resilience of the country's population is key to surviving future economic and social shocks.

The report, State of the State New Zealand 2017: Fit for the future, by leading professional services firm Deloitte and Victoria University's School of Government, urges the Government to lead the battle by placing improved resilience at the centre of its policy.

Deloitte partner David Farrelly says, "If wellbeing is our quality of life, then resilience is how to secure our quality of life."

Deloitte's State of the State report looks at how we can boost resilience in the face of uncertainty.
DELOITTE

Deloitte's State of the State report looks at how we can boost resilience in the face of uncertainty.

He added: "Our report considers how well households are able to maintain or recover their levels of wellbeing in the event of disruption or shock. We have developed a framework to provide insight into the many interacting dimensions of household resilience such as financial resources, health, education, social networks and connections."

Victoria University School of Government Research Fellow Toby Moore says that it's natural to focus on these large scale shocks given New Zealand's recent experiences with the global financial crisis, the Canterbury and Kaikoura earthquakes and this year's Edgecumbe floods.

But he added: "We should also be concerned with smaller scale shocks that threaten our wellbeing. In any given year Kiwis will suffer economic loss, health problems or adverse changes in the lives of those closest to them. From a household wellbeing perspective these events can have as great an impact as any large scale shocks."

So what are the problems and what are the possible solutions?

In a 2016 Treasury survey about what matters to Kiwis, resilience was considered the second most important quality for individuals, behind good health and ahead of housing, income and personal safety. Though the country is near the top of international measures of economic and social wellbeing the report warns these are some worrying trends particularly affecting low- to medium-paid households.

NZ employment is high but workers tend to increase their incomes by working longer hours which can lead to stress and a lowering of resilience.

NZ Gross Domestic Product stands 20 per cent behind that of OEDC average and productivity is sluggish.

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Real incomes increased 31 per cent between 1982 and 2015 but the overall rise masks the existence of groups that haven't benefited from this trend, particularly when costs of living are considered. The 10 per cent of Kiwis with the lowest income have experienced a slight drop in income after housing costs during the same period.

The report also finds that one in nine New Zealanders suffer a significant drop in household income in any one year. Housing is also a problem area with values rising far faster than inflation resulting in lower income families spending up to 55 per cent of their income on putting a roof over their heads. The proportion of Maori and Pasifika living in a home the household owns has dropped 32 per cent and 38 per cent respectively between 1991 and 2013.

In education, which the report says can have a critical impact on later resilience levels, all is not progress. The proportion of school pupils reach NCEA Level 2 stands at 74 per cent two per cent lower than the OECD average while the proportion of people reaching tertiary education in NZ has fallen.

On the issue of rising child poverty the report calls for a trial run of universal child allowance which was abolished in NZ in 1991 in favour of targeted benefits. It calls for another trial involving a state top-up of households who are prone to experiencing fluctuations in income.

To implement these and other measures aimed at increasing Kiwi resilience the report calls for government action.

It argues resilience should be at the centre of policy decisions, especially in the areas of health, housing and education. It recommends that a Resilience Unit be created within government with accountability for ensuring that public institutions and policy are actively boosting resilience.

The State should also explore and run social investment programmes targeting households with low resilience and engage with the New Zealand public to improve how we measure resilience.

The full report can be read by visiting www.deloitte.com/nz/stateofthestate or watch the video above.

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