New Zealand’s Living Standards Framework

 The New Zealand Treasury’s Living Standards Framework (LSF) organizes the assessment of multidimensional well-being into three core levels: Individual and Collective Well-being, Institutions and Governance, and Wealth. These levels are analyzed through four "lenses" or analytical prompts: Distribution, Resilience, Productivity, and Sustainability.

The sources provide the following details regarding these core levels:

1. Individual and Collective Well-being

This level focuses on the personal and shared aspects of life that contribute to well-being. Its dimensions include:

• Health and Subjective well-being.
• Knowledge and skills, as well as Cultural capability and belonging.
• Work, care, and volunteering, and Leisure and play.
• Housing, Safety, and Environmental amenity.
• Engagement and voice, and relationships with Family and friends.

2. Institutions and Governance

This level examines the structures and social groups that organize and support society. It specifically includes:

• Whānau, hapū and iwi, representing extended family and descendant groups in Māori culture.
• Families and households, Civil society, and Firms and markets.
• Central and local government and Intergenerational connections.

3. Wealth

The framework considers Wealth as the third core level for assessing long-term well-being.

Context and Application

• Analytical Lenses: The Treasury uses the four lenses (Distribution, Resilience, Productivity, and Sustainability) to evaluate these levels, helping analysts understand policy impacts, long-term implications, and trade-offs between different options.
• LSF Dashboard: To monitor these levels, an indicator dashboard was released in 2018 and is updated every six months. It provides data on trends and disaggregates information by sex, ethnicity, and region.
• Complementary Frameworks: The LSF is not intended to be used in isolation. It is used alongside the He Ara Waiora Framework, which explores well-being from te ao Māori and Pacific perspectives, and aligns with Ngā Tūtohu Aotearoa (Indicators Aotearoa New Zealand).

Within the New Zealand Treasury’s Living Standards Framework (LSF), Analytical Lenses (also referred to as analytical prompts) serve as the primary tools for evaluating the three core levels of well-being: Individual and Collective Well-being, Institutions and Governance, and Wealth.

The sources identify four specific lenses used to examine these levels:

• Distribution: This lens focuses on how well-being outcomes are spread across different groups. The framework's accompanying dashboard supports this by providing disaggregated data based on sex, ethnicity, and region.
• Resilience: Analysts use this prompt to assess the ability of systems and populations to withstand or recover from challenges.
• Productivity: This lens evaluates the efficiency and effectiveness with which resources are used to generate well-being.
• Sustainability: This prompt is used to consider the long-term implications of policies and whether current well-being can be maintained for future generations.

Role in Policy Development

The Analytical Lenses are integral to the Treasury's mandate of providing economic and financial advice. They assist analysts in the following ways:

• Systematic Assessment: They provide a structured way to consider the drivers of well-being and the broader impacts of Treasury advice.
• Evaluating Trade-offs: The lenses help identify and evaluate trade-offs between alternative policy options, such as the tension between immediate productivity gains and long-term sustainability.
• Evidence-Based Reporting: By utilizing the LSF Dashboard, which updates every six months, analysts can apply these lenses to real-world data, including trends over time and international comparisons, to guide cross-government well-being priorities.

The LSF, including these lenses, is designed to be used alongside other tools like the He Ara Waiora framework to ensure a comprehensive understanding of well-being that includes te ao Māori and Pacific perspectives.

To ensure the Living Standards Framework (LSF) is effective for policy advice and monitoring, the New Zealand Treasury utilizes several implementation tools designed to provide evidence-based insights and practical guidance.

According to the sources, the primary implementation tools and resources include:

1. The LSF Dashboard

The LSF Dashboard is the central monitoring tool developed in 2018 to support the framework.

• Ongoing Monitoring: It provides an indicator set used to inform well-being reporting and guide advice on cross-government priorities.
• Regular Updates: The data is updated every six months (typically in April and October) to ensure the information remains relevant for ongoing reporting.
• Granular Data: Where possible, the dashboard includes trends over time, international comparisons, and data disaggregated by sex, ethnicity, and region.

2. Alignment with National Data Sets

The LSF implementation is supported by and aligned with Ngā Tūtohu Aotearoa (Indicators Aotearoa New Zealand). This is described as a "broad and deep source of well-being data" that supports a wide range of reporting requirements across the government.

3. Integrated Frameworks

The LSF is designed to be used as a tool in conjunction with other frameworks to provide a more comprehensive view of well-being:

• He Ara Waiora: This framework is used alongside the LSF to ensure that policy advice accounts for te ao Māori and Pacific perspectives.
• Together, these frameworks provide the evidence base for the Treasury’s financial and economic advice to the Government.

4. Practical Guidance for Agencies

Beyond the data tools, the Treasury provides specific guidance for the practical application of the framework:

• Agency Planning: There is specific guidance on "Applying a wellbeing approach to agency planning and performance reporting," which helps government departments integrate these concepts into their standard operations.
• Impact Assessment: The Treasury also shares experience and guidance on impact assessment and how to use the LSF to determine value for money in policy options.

These tools collectively transform the LSF from a conceptual model into a systematic way for analysts to understand the drivers of well-being and evaluate the long-term impacts of their advice.

The Living Standards Framework (LSF) was established in 2011 with the primary purpose of integrating multi-dimensional and long-term understandings of well-being into the New Zealand Treasury’s economic advice to guide policy decisions. It serves as a conceptual tool designed to support analysts in understanding the drivers of well-being and the wider dimensions that must be considered when formulating advice.

Core Purpose and Objectives

• Systematic Understanding: The LSF provides a structured, evidence-based way to understand well-being drivers and consider the broader impacts of the Treasury’s advice.
• Evaluating Trade-offs: A critical function of the framework is helping analysts identify and evaluate trade-offs between alternative policy options.
• Long-term and Distributional Focus: It prompts analysts to think beyond immediate outcomes to consider the long-term and distributional implications of various policies.

Policy Relevance and Application

The framework is highly relevant to the practicalities of government policy and reporting in several ways:

• Guiding Cross-Government Priorities: The LSF Dashboard, which provides ongoing monitoring through indicators updated every six months, is used to inform well-being reporting and guide advice on cross-government well-being priorities.
• Economic and Financial Advice: By combining evidence from the LSF with the He Ara Waiora Framework (which provides te ao Māori and Pacific perspectives), the Treasury can provide more holistic economic and financial advice to the Government.
• Agency Performance: The framework's principles are applied to agency planning and performance reporting, helping government departments align their operations with a well-being approach.
• Impact Assessment: It is used as a tool for impact assessment and for determining the value for money of different policy options.
• Data Alignment: To maintain policy relevance, the LSF aligns where possible with Ngā Tūtohu Aotearoa (Indicators Aotearoa New Zealand), a comprehensive source of well-being data used for various reporting requirements.

Because the LSF is not intended to be a comprehensive "catch-all" on its own, its policy relevance is maximized when used alongside other frameworks to ensure a diverse range of perspectives and data are captured in the advice provided to decision-makers.

The New Zealand Treasury first established the Living Standards Framework (LSF) in 2011. Its original purpose was to serve as a conceptual tool to assist analysts in understanding the drivers and various dimensions of well-being, specifically to help them identify trade-offs between different policy options. By incorporating multi-dimensional and long-term perspectives into economic advice, the framework was designed to provide a more holistic guide for policy decisions.

To ensure the framework remained relevant and of high quality, the Treasury implemented a process of periodic reviews, which resulted in significant updates in 2018 and 2021. A key historical development occurred in 2018 with the release of the LSF Dashboard. This indicator set was created to provide ongoing monitoring of well-being outcomes and to help guide policy advice regarding cross-government priorities. Since its inception, the dashboard has been updated every six months (typically in April and October) to support continuous well-being reporting with data that includes historical trends and international comparisons.

The history of the LSF is also defined by its integration with other national frameworks to ensure a more comprehensive view of New Zealand's society:

• He Ara Waiora: Developed in 2017, this framework is used alongside the LSF to explore well-being from te ao Māori and Pacific perspectives.
• Ngā Tūtohu Aotearoa: The LSF aligns with these national indicators (Indicators Aotearoa New Zealand) to leverage a "broad and deep source of well-being data" for government reporting requirements.