The Living Standards Framework (LSF) captures many of the things that matter for New Zealanders’ wellbeing, now and into the future.
The LSF is a flexible framework that prompts our thinking about policy impacts across the different dimensions of wellbeing, as well as the long-term and distributional issues and implications of policy.
It supports Treasury analysts by providing a framework to understand the drivers of wellbeing and to consider the broader impacts of our policy advice in a systematic and evidenced way.
The 2021 Living Standards Framework
This section describes the current version of the Living Standards Framework (LSF), which was released in October 2021, and which is shown in the figure below.
We continue to evolve the LSF because the Treasury is committed to offering the best economic advice it can. This requires us to continually develop and strengthen our key analytical and policy frameworks, such as the LSF.
The framework released in 2021 responds to feedback from stakeholders to better reflect culture and children’s wellbeing, including being more compatible with te ao Māori and Pacific cultures.
The LSF includes three levels:
- Our Individual and Collective Wellbeing: This level captures the resources and aspects of our lives that have been identified by research or public engagement as important for our wellbeing as individuals, families, whānau and communities.
- Our Institutions and Governance: This level captures the role our institutions and organisations play in facilitating the wellbeing of individuals and collectives, as well as safeguarding and building our national wealth.
- The Wealth of Aotearoa New Zealand: This captures how wealthy we are overall, including aspects of wealth not fully captured in the system of national accounts such as human capability and the natural environment.
The framework also includes analytical prompts that are the key lenses we use to analyse wellbeing across the three levels of the framework. The analytical prompts are: distribution, resilience, productivity and sustainability.
The Treasury’s Living Standards Framework
While the LSF is summarised by the picture above, it is more than just this simple picture. It incorporates a range of deeper concepts, documents and tools that we use to elaborate and apply LSF concepts to our work at the Treasury.
You can read more about the concepts in the LSF here: The Living Standards Framework (LSF) 2021.
How does the LSF relate to other frameworks?
The LSF does not seek to comprehensively incorporate everything that is important for children, or everything that is important from te ao Māori and Pacific perspectives. We have aimed to incorporate some of the most important concepts at a high level, but intend to use the LSF alongside in-depth frameworks such as:
- He Ara Waiora for a mātauranga Māori perspective on wellbeing
- Fonofale for a Pacific perspective on wellbeing, and
- The Children’s Commissioner’s Wellbeing Wheel for a perspective on children’s wellbeing.
This approach avoids overloading the LSF with too much complexity and helps maintain the integrity of those complementary perspectives.
Why have we developed the LSF?
The LSF was developed to support the Treasury to consider the range of things that matter to New Zealanders.
The LSF adds strength to the Treasury in our role as the government’s lead economic and finance adviser. It provides a framework to understand the drivers of wellbeing and to consider the broader impacts of our policy advice in a systematic and evidenced way.
We consider that drawing on a range of data and evidence to understand the interdependencies and trade-offs across the different dimensions of wellbeing is consistent with robust economics and policy analysis.
Economics provides powerful tools for thinking through a wide range of policy challenges and opportunities in order to raise living standards for New Zealanders. The LSF complements rather than replaces the other analytical frameworks that the Treasury uses. Using the LSF also requires a sophisticated understanding of economics and empirical capabilities.
What is the LSF Dashboard?
The LSF Dashboard is a measurement tool that complements the LSF by providing a range of indicators for wellbeing outcomes.
The Dashboard supports wellbeing reporting, including the Treasury’s first Wellbeing Report due in 2022, and our advice to Ministers on priorities for improving wellbeing.
A new version of the LSF Dashboard was released on 12 April 2022 to align with the current version of the LSF.
For further details see our overview of the Dashboard here: Measuring Wellbeing: the Living Standards Framework Dashboard.