The Treasury

Global Navigation

Personal tools

4  Social inclusion

Most New Zealanders are benefiting from the country's increasing prosperity but a minority face significant economic and social barriers to inclusion and improved living standards. This minority has poorer health, education, employment, and criminal justice outcomes, which are often apparent from an early age.

New Zealanders spend a great deal of time and money on improving social outcomes for themselves and others through volunteering and donations, taxes, and service delivery. Government can contribute to improved living standards and enhanced productivity and growth by focusing on improving the outcomes from social spending. This would contribute to better outcomes for people and the country's long-term fiscal position.

This contribution can be achieved in part by a social investment approach. Social investment involves applying evidence-based investment practices to social spending to improve the fiscal and non-fiscal returns from government's investment in social services.[99]

Modelling of the potential impact of implementing social investment for this Statement demonstrates that improving the effectiveness of services can also deliver fiscal returns for the country (as set out in Section Six). It identifies that the real challenge will come from the public sector responding to the need to be more flexible, more effective at targeting resources and better at using available data.

More effective social spending can contribute to a higher level of social inclusion. By targeting social investment well, government can support New Zealanders to participate in society and the economy to the best of their ability.

Social inclusion is about building on the capabilities of individuals, families and communities to improve outcomes for every New Zealander. There is variation in outcomes across society, both positive and negative. For example, most New Zealanders have strong support networks – 99 percent of people, the highest in the OECD, believe they know someone they could rely on in a time of need.[100] Yet in 2015 between five and eight percent of New Zealanders were experiencing material hardship[101] – that is material well-being below a minimum acceptable level,[102] or "doing without the things most New Zealanders consider essential."[103]

Including all New Zealanders can deliver long-term benefits across society and improve longer-term prospects for the most vulnerable. By contrast, when people are excluded from participating in society there is greater pressure on government finances and opportunities for economic growth are inhibited (e.g. through reduced labour market participation). This Section discusses the barriers to social inclusion and ways to address social challenges in the context of the long-term fiscal position.


  • [99] See "Social Investment" at:
  • [100] See the "How's Life?" summary at:
  • [101] Bryan Perry (2016) The material well-being of New Zealand households: trends and relativities using non-income measures, with international comparisons, Ministry of Social Development, p 67. Note that the variation between rates reflects the difference between more or less stringent thresholds of "material hardship".
  • [102] Perry (2016), above note 101.
  • [103] See Child Poverty Monitor website at:
Page top