Wellbeing Budget 2023

Support for today
Building for tomorrow

Human capability

Human capability includes our knowledge and education, physical and mental health, and cultural capability.

The value of New Zealand’s human capability has been steadily increasing over the past two decades. This is measured by estimating the value of expected lifetime earnings from educational achievement. However, Te Tai Waiora also raised concerns about declining trends in educational achievement which may play out into lower human capability over time.

The labour market remains strong with continued growth in employment. The unemployment rate remains at historically low levels and labour force participation reached its highest ever rate since the Household Labour Force Survey began, suggesting that increasing numbers of New Zealanders have been drawn into the labour force as a result of the opportunities for good work.

Economic activity has also benefitted from the return of international tourism (overseas visitor levels have returned to over 70 percent of pre-COVID-19 levels as of February 2023) and increased construction activity (up 5.6 percent in the year to December 2022). Wages continue to rise, with average hourly earnings up 7.6 percent in the year to March 2023. This will provide some support to household budgets which are being increasingly affected by increased mortgage interest rates. There are some early signs of easing labour market constraints, with the recovery of net inward migration to 52,000 in the year to February 2023 helping to meet demand for critical skills.

Good health supports opportunities to develop human capability, while poor health can have a cascading impact in a range of wellbeing domains. COVID-19 has continued to disrupt the provision of health care. Patterns of inequality in healthcare access appear to have deepened, for example immunisations of young children falling, especially for Māori and Pacific children. An increasing share of the population has been reporting psychological distress over the last 10 years, particularly among young people (15 to 24 year olds).

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