New Zealand

Aided by a quick recovery from the pandemic’s first wave, the country scores in the upper-middle ranks (rank 13) in terms of economic policy. Its score on this measure is unchanged relative to 2014.

New Zealand’s initial successes in eliminating COVID-19 allowed the economy to reopen more quickly than most. A sharp collapse in GDP in mid-2020 was followed by an even larger rebound, and modest growth in early 2021. Large-scale fiscal support to businesses, wage subsidies and a loose monetary policy helped prevent sweeping unemployment and insolvencies.

The unemployment rate plunged to 3.4% in mid-2021. The strong showing was partly due to travel restrictions preventing the arrival of migrants. Structural problems persist, with higher unemployment rates among young Māori and Pacific Islander people. The country’s tax-to-GDP ratio is significantly below the OECD average. The agricultural sector will soon have to start paying for emissions.

Government support spending pushed the budgetary balance to a deficit of 9.6% of GDP in 2020. Surpluses are expected again in 2023/2024. Debt is expected to peak at around 40.1% of GDP before declining again to around 30%. Public R&D investment strategies have been shifted to focus on green investment.

With good educational attainments and a well-performing health system, New Zealand receives high rankings internationally (rank 9) with regard to social policies. Its score on this measure has fallen by 0.2 points relative to its 2014 level.

Despite limited healthcare resources, the healthcare system performed well during the pandemic thanks to lockdowns and other policy interventions. Waiting lists in the public healthcare system drive many to private “queue jumping” insurance, but this has increased inequality. Pension benefits are comparatively low, but keep most people out of poverty.

The education system performs generally well, but is unequal, with outcomes generally poorer for Māori and Pacific Islander students. A strong dependence on international student fees produced pandemic-era financial difficulties for the university system. Migrants are in general well-integrated.

Inequality is an increasing problem, with high housing costs a growing problem for the poor. Policies aimed at easing the housing crisis have yet to produce a discernable effect. Recently passed family support policies give mothers more flexibility in deciding whether and when to return to employment. Several recent terrorist attacks have prompted gun buybacks and expanded policing powers.

With questions outstanding about the efficacy of its climate-change policy, New Zealand falls into the middle ranks (rank 21) in terms of environmental policy. Its score on this measure has increased by 0.3 points relative to its 2014 level.

The government has passed a climate-change act that targets a reduction of (non-biogenic) greenhouse-gas emissions to zero by 2050, while reducing biogenic methane emissions nearly by half by the same year. However, the country’s performance in reaching its commitments has been rated as “highly insufficient.”

The country’s large agricultural sector produces considerable methane and nitrous oxide gasses. The meat and dairy sectors have additionally led to heavy pollution of water resources. Biodiversity decline is a serious issue.

COVID-era budgets have been crafted to respond to environmental sustainability challenges including weed and pest control, biodiversity enhancement, wetlands and waterways restoration, and railway construction. These plans have been criticized as being too short-term.

With fair and transparent electoral policies and a strong rule of law, New Zealand receives a high overall ranking (rank 9) for the quality of its democracy. Its score on this measure has declined by 0.3 points relative to 2014.

Voting policies are open and inclusive. Seven parliamentary seats are currently designated for Māori representatives. Turnout rose in 2020 despite a lockdown-necessitated election delay. Campaign financing is monitored by an independent commission, but private funding is criticized as being insufficiently transparent. Voters supported assisted dying but not cannabis legalization in referendums held in 2020.

The broadcast media sector is largely controlled by international companies. Civil rights and political liberties are strongly protected, though new police warrantless-search powers granted in the wake of terrorist attacks have been criticized. Māori and Pacific Islander people experience significant disadvantages. Some positive-discrimination measures for these communities exist.

Courts have ruled that employment-based vaccine mandates are impermissible. Despite the lack of a written constitution, strong courts and a culture of respect for the law create legal certainty. Corruption is very rare.

With a strong focus on interministerial coordination, New Zealand is rated among the top performers (rank 4) in the area of executive capacity. Its score on this measure has declined by 0.2 points relative to its 2014 level.

Power is concentrated within the cabinet, resulting in a highly cohesive system of cabinet government. The Department of the Prime Minister and the Cabinet (DPMC) has a number of strategic policy-advisory units. Formal and informal coordination between ministries and with the government office is common, with all policy proposals reviewed in cabinet committees.

Impact assessments are systematically performed, with a broad scope of assessment. The use of digital tools is highly developed. Ex post evaluation of regulations is weaker than the OECD average. Societal consultation is not legally required, but is widely practiced. The Labour-led government performed well in response to the pandemic, but has failed to deliver on a number of other promises.

Communication has been largely coherent. While special interests sometimes influence the development of regulations, subsequent enforcement is generally unbiased. A new Public Service Act is designed to create a “unified public service” that facilitates cross-departmental collaboration.

With mixed oversight capabilities, New Zealand falls into the upper-middle ranks (rank 16) with regard to executive accountability. Its score on this measure has declined by 0.2 points relative to its 2014 level.

Parliamentarians have comparatively slim resources, but ample oversight powers. The highly effective ombuds office is the world’s fourth-oldest. A new Privacy Act, administered by the Privacy Commissioner, requires businesses to report privacy breaches.

The population’s policy knowledge is generally strong, with voters submitting a large number of comments on issues with public resonance. The media landscape is dominated by commercial companies. Newspapers provide high-quality content, but broadcast companies focus on entertainment. A number of online publishers produce high-quality journalism.

Decision-making styles in the traditional political parties vary. The small number of well-organized economic associations are involved in lobbying and policy formation. Other civil-society groups are frequently consulted by decision-makers, but vary strongly with regard to organizational resources.