Intermediate Outcome: Enhanced Human Capital and Labour Supply
Skills influence productivity and growth directly, through their impact on labour productivity and labour utilisation; and indirectly, through their effect on other drivers of growth, such as innovation and international connectedness.
Along with MSD, the Treasury continues to be the joint lead on the suite of reforms to the welfare system, with a particular focus on the accountability and funding arrangements. The purpose of welfare reforms is to reduce the number of people who remain on a benefit for more than 12 months thereby reducing the long-term liability of the benefit system, increasing labour force participation and ultimately economic performance. We have helped complete the policy changes necessary for the legislation to be drafted for the first phase of welfare reform (including Youth Services and changes to work expectations for sole parents); and began work on the second phase of welfare reform (including establishing an investment approach for the benefit system). From next year the Treasury will become the external monitor of Work and Income, to ensure effective implementation of the investment approach.
We have contributed to the development of coordinated education and welfare policies to support youth achievement, such as the Youth Guarantee and Youth Services. We have also contributed to tertiary education policies encouraging the retention, achievement and progression of students to higher levels of study, as well as the development of student support settings. Together these are seeking to lift our youth achievement as outlined in the box below. We decided to be bold in our public communications on education policy to help stimulate the public debate.
Our youth achievement
The New Zealand NEET (not in education, employment or training) rate for June 2011 was 12.5%, compared to the OECD average NEET rate in 2011 of 12.2%. In the September 2011 quarter, the unadjusted NEET rate for 15-24-year-olds was 11.7% (down from 12.2% in September 2010) indicating a continued downward trend in New Zealand's NEET rate.
In 2010, 68.8% of school leavers achieved National Certificate of Educational Achievement (NCEA) Level 2 or above; this compares to 69.8% in 2009. However, 2010 NCEA data include students not captured in previous years. When these students are excluded (to enable trend comparisons) the data indicate that 74.5% of school leavers achieved NCEA Level 2 in 2010. In 2009, 38% of those aged 25 and younger had completed a tertiary qualification at Level 4 or above.
