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Too many New Zealanders experience persistent disadvantage

Many New Zealanders continue to thrive as they exercise the choices and explore the opportunities available in the communities, businesses and economy of Aotearoa New Zealand. However, 697,000 New Zealanders experience persistent disadvantage, with sole parents and Pacific peoples experiencing the highest rates, followed by Māori and people with disabilities.

An estimated 172,000 people experienced complex and multiple forms of persistent disadvantage in both 2013 and 2018.1

The cycle of persistent disadvantage experienced by too many cannot be ignored, or tolerated as inevitable, or put off till another day, or accepted as too difficult to change. The costs are borne by all – individuals, families, whānau, businesses, communities, government and our entire nation. Equally, we all stand to gain when this cycle of persistent disadvantage is broken.

Everyone in Aotearoa New Zealand wants to live good lives. New Zealand has a long history of valuing fairness and “a fair go”. We were the first country in the world to introduce universal suffrage, and there is a strong tradition of standing against anti-egalitarian regimes. A fair chance for all means all New Zealanders, present and future, feel proud of their cultural identities, are supported to achieve their aspirations, and have genuine choices and access to opportunities to live better lives.

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.

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 ora2 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. A summary follows.


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.

Our recommendations

Build on system change already underway

We acknowledge that system change is not easy and requires time and commitment. Many people are already working hard to shift the system, and the broader values and most of the ideas needed are already available and present in the system.

He Ara Waiora is a wellbeing framework based on Māori knowledge that is being developed and applied alongside Treasury’s Living Standard’s Framework. He Ara Waiora, along with the All-of-Government Pacific Wellbeing Strategy, also emphasise collective and intergenerational

perspectives on economic and community activity. These perspectives can help balance the overly individualistic and short-term focus that currently dominate the system.

A social floor should be established, and existing work must be progressed and expedited

A social protection floor is described as “nationally-defined sets of basic social security guarantees which secure protection aimed at preventing or alleviating poverty, vulnerability and social exclusion” (International Labour Office, 2012). Establishing this baseline is necessary to give effect to the implied social contract that enables business and economic activity.

Such a baseline standard of living would also need to be consistent with te Tiriti obligations of both partners. Several submissions also noted that a social floor would be consistent with Aotearoa New Zealand’s human rights obligations under national laws and international agreements.

The Treasury and other agencies, working with people experiencing persistent disadvantage, should define such a floor as part of the Living Standards Framework and He Ara Waiora. This should include defining the levels of income required for individuals, families and whānau to meet the material requirements for social inclusion, while recognising that non-material requirements are also important.

In the short term, we recommend existing work relating to protective factors needs to be not only progressed but expedited. The Government should continue to develop and fully implement reforms in related policy areas. Although these reforms are part of the solution to addressing persistent disadvantage and may assist in providing basic living standards as part of the protective social floor, the recommendations in this report also need to be considered, to address the complexity and interconnection of factors that create and perpetuate inequities.

Gain cross-party agreement on approaches and long-term wellbeing objectives

We see value in pursuing a combination of the current and previous government approaches to addressing persistent disadvantage. It is important to identify where early investment could make the most difference in people’s lives, and to set goals focusing on improvements to address the complex problems spanning multiple domains and agencies.

Cross-party agreement to develop and implement generational (20- to 30-year) strategic wellbeing objectives will be essential for sustaining the long-term commitment needed to address persistent disadvantage, with progress regularly monitored and reported.

Legislation and institutions to accelerate system shifts

A Social Inclusion Act – alongside, and complementary to, the Child Poverty Reduction Act 2018 – would underpin accountability for efforts addressing persistent disadvantage. The primary purpose of the Social Inclusion Act would be to require the Government of the day to state its short- and long-term objectives towards reducing persistent disadvantage in measurable terms, and to explain how it proposes to meet those objectives.

In recognition of the current absence of voice for future generations, as well as the inherent short-term bias within the public management system, a Wellbeing of Future Generations Act is

recommended. This would establish a Parliamentary Commissioner for Future Generations, whose statutory role would be to represent the interests of future generations.

Adapt, evaluate, listen, learn, and innovate

The accountability and learning systems within the public management system should be reviewed and revitalised to encourage new approaches which work across government agencies, and to hear and value evidence from people and communities experiencing disadvantage. The objective is to develop a more responsive, relevant and accessible public accountability system that builds trust and empowers people – particularly those experiencing persistent disadvantage, who are not well served by current accountability settings. The public management system must be one that learns from experience, corrects mistakes and improves what it does. It should empower people experiencing disadvantage by giving them a more influential voice.

The Government should commission a programme of policy work aimed at enabling and sustaining more locally led, whānau-centred and centrally enabled initiatives that directly support people’s autonomy to make changes in their lives. This work, which should be undertaken in collaboration with community partners, will require resourcing for both agencies and community partners.

Eligibility and accountability settings to ensure public funds are used appropriately should not excessively constrain the cross-cutting nature of these approaches. Eligibility criteria should include appropriate endorsement that organisations authentically engage with and are accountable to their respective communities. In particular, eligibility criteria should ensure organisations are accountable to the people in their communities that are experiencing persistent disadvantage.

Long-term funding needs to be committed to such initiatives, provided ongoing effectiveness and/or improvement can be demonstrated.

Collect better information

Aotearoa New Zealand has poor data on how people’s fortunes change through time and across generations. The Government and government agencies should invest in data collection for measuring wellbeing and disadvantage over a life course, between generations, and within different communities.

Next steps

People experiencing persistent disadvantage need to be empowered to influence the decisions that affect their lives, whether those decisions are made in the public management system or in local support networks. In this report, we map out a sequence of actions needed to carry out our recommendations.

As individuals, as family, as whānau and as communities, the needs of people experiencing persistent disadvantage must be addressed in ways that are effective in enabling all to achieve the lives they value – respecting and enhancing their mauri ora. It is important for people to find support in their own communities from people they trust and can hold accountable. When mistakes occur or needs change, people should see support systems (whether national or local) change in a timely way to meet their needs.

More effective support and long-term commitments, decisions and actions addressing the underlying causes of persistent disadvantage in Aotearoa New Zealand are required. The benefits of fewer people and communities experiencing persistent disadvantage will be enjoyed across Aotearoa New Zealand, as the individual and collective potential of all are nurtured and increasingly realised.

1. Estimates depending on whether disadvantage is being experienced across one, two, or all three domains, as defined in the Persistent disadvantage and social inclusion section.

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.