The New Zealand Treasury’s Living Standards Framework helps to integrate multi-dimensional and long-term understandings of well-being in its policy and budgeting decisions. The He Ara Waoira Framework complements and deepens this work by integrating Māori knowledge and perspectives in well-being evidence and analysis.
New Zealand’s Living Standards Framework and He Ara Waiora Framework
Abstract
Context
The New Zealand Treasury has been developing its Living Standards Framework since 2011. It was established as a conceptual tool to support improvements in the quality of the Treasury’s advice through reminding Treasury analysts of the wider dimensions of well-being to be taken into account when formulating policy advice, and in considering the trade-offs between alternative policy options. The Framework was revised in 2018 and, most recently, in 2021. In addition, the He Ara Waiora framework was developed with the participation of an expert group of Māori thought leaders to better integrate Māori perspectives on well-being and living standards in the Treasury’s policy advice. The Treasury applies both the Living Standards Framework and He Ara Waiora to explore well-being from different cultural perspectives.
Description and key outcomes
The current Living Standards Framework (LSF) assesses multidimensional well-being across three levels: individual and collective well-being, institutions and governance, and wealth. These levels are analysed through the lenses of distribution, resilience, productivity and sustainability. He Ara Waiora presents a holistic, intergenerational approach to well-being, articulating both the ends (the important elements in Māori perceptions of well-being and living standards), and the means (the tikanga values or principles that help achieve the ends). Together, the collected evidence supports the Treasury in providing economic and financial advice to the Government.
An accompanying indicator set – the LSF Dashboard – helps to inform well-being reporting and guide policy advice on cross-government wellbeing priorities. The Dashboard played a key role in shaping New Zealand’s first well-being budget in 2019, informing analysis to identify a longlist of 12 well-being priorities which were then narrowed down to 5 priorities after an extensive process of expert consultation and cross-Ministry deliberation. The LSF Framework and accompanying dashboard informed subsequent well-being budgets in New Zealand. Agencies have been required to use the LSF domains as part of their value-for-money assessment since Budget 2019, and since Budget 2021 He Ara Waiora was also gradually introduced into value or well-being assessments.
In 2020 an amendment to the Public Finance Act 1989 introduced new requirements for the Government to report annually on its well-being objectives in the Budget, and for the Treasury to report every four years on the state of well-being in New Zealand. The LSF dashboard and indicators related to the He Ara Waiora Framework underpin these well-being reports, the first of which was published in 2022.
Policy relevance
The LSF and He Ara Waiora Frameworks provide complementary frameworks to understand the drivers of well-being and to consider the broader impacts of the Treasury’s policy advice in a systematic and evidence-based way.They help inform Treasury analysts’ thinking about policy impacts across different well-being dimensions, as well as the long-term and distributional implications of policies.
Further information
New Zealand Treasury (2023), “He Ara Waoira”, https://www.treasury.govt.nz/information-and-services/nz-economy/higher-living-standards/he-ara-waiora
New Zealand Treasury (2023), “Using the LSF and He Ara Waiora”, https://www.treasury.govt.nz/information-and-services/nz-economy/higher-living-standards/using-lsf-and-he-ara-waiora
New Zealand Treasury (2022), “Our Living Standards Framework”, https://www.treasury.govt.nz/information-and-services/nz-economy/higher-living-standards/our-living-standards-framework
New Zealand Treasury (2022), Te Tai Waiora: Wellbeing in Aotearoa New Zealand 2022, https://www.treasury.govt.nz/publications/wellbeing-report/te-tai-waiora-2022
New Zealand Treasury (2021), The Living Standards Framework 2021, https://www.treasury.govt.nz/sites/default/files/2021-10/tp-living-standards-framework-2021.pdf
New Zealand Treasury (2019), “Applying a wellbeing approach to agency planning and performance reporting”, https://www.treasury.govt.nz/information-and-services/state-sector-leadership/guidance/reporting-financial/applying-wellbeing-approach-agency-planning-and-performance-reporting
OECD resources
OECD, How’s Life in your country? Country notes, New Zealand, https://www.oecd.org/wise/measuring-well-being-and-progress.htm#country-notes
OECD (2023), Economic Policy Making to Pursue Economic Welfare: OECD Report for the G7 Finance Ministers and Central Bank Governors, May 2023, Japan, OECD, Paris. https://www.oecd.org/economy/G7_Beyond_GDP_Economic_policy_making_to_pursue_economic_welfare_2023.pdf
OECD (2019), “Well-being: performance, measurement and policy innovations”, in OECD Economic Surveys: New Zealand 2019, OECD Publishing, Paris, https://doi.org/10.1787/b0b94dbd-en
