Boosting resilience key to future wellbeing

A Deloitte and Victoria University of Wellington report finds the resilience of New Zealand households should be an explicit focus of government policy

Boosting the resilience of New Zealand households should be an explicit focus of government policy, according to a report released today by Deloitte and Victoria University of Wellington’s School of Government.

State of the State New Zealand 2017: Fit for the future says that while government influences household resilience in many ways, resilience is not currently the primary objective of public policy.

Deloitte partner Dave Farrelly says resilience is the ability for Kiwi households to absorb, bounce back from, or adapt to disruption without compromising their long term wellbeing.

“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,” says Mr Farrelly.

“In the next 25 years we can expect to face both sudden shocks and long-term disruption. While we can anticipate things like natural disasters, global economic downturns and the changing nature of work, we can’t always predict them or their effects on New Zealand,” he adds.

“If wellbeing is our quality of life, then resilience is how secure our quality of life is.”

Victoria University School of Government Research Fellow Toby Moore says that it’s natural to focus on 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 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,” says Mr Moore.

The report observes that the costs of education, housing and healthcare have been rising faster than overall inflation, leaving more households struggling to meet everyday needs. The report also found that the volatility of incomes was a major issue for many New Zealanders. In any given year, one in nine working age Kiwis will suffer from a significant fall in income. Some of the ways households are forced to manage shortfalls, like postponing a visit to the doctor or dentist, increase future risk. As a result of trends like these many households are in a poorer position to deal with disruptions.

In the six months of research for the report, Deloitte and Victoria spoke to some of New Zealand’s brightest thinkers and most senior leaders from the public sector, business, non-government, media and academia – all of whom provided a unique perspective on household resilience and a consensus on its importance.

State of the State 2017 proposes four recommendations to boost resilience and ensure New Zealand households are fit for the future. The recommendations are to:

1. apply and evaluate explicit resilience objectives in health, education and housing policy

2. explore policy interventions that advance trials to build household resilience through a social investment approach and income support

3. establish a Resilience Unit to strengthen our public institutions’ focus on resilience

4. engage with New Zealanders to build a wellbeing and resilience index.

“National resilience is a composite of the resilience of households, businesses, social and public sectors. In an environment where our wellbeing is tested by disruptions there are strong arguments for government to take an active role in boosting household resilience. Not only is this relevant to all New Zealanders, it is topical for our current Government given recent pre-Budget announcements,” concludes Mr Farrelly.

The full report can be viewed or downloaded at www.deloitte.com/nz/stateofthestate.

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