Culture and The Living Standards Framework

The vision of the New Zealand Treasury is to promote higher living standards for all New Zealanders. To support this, the Treasury uses the Living Standards Framework to guide its policy advice. In 2017, the Living Standards Framework underwent a major “refresh” to focus it on the four capital stocks that form the resource base for intergenerational wellbeing. The capitals are called capitals because they are means of production (i.e., the capitals are the stock of ingredients we use to produce the future flow of wellbeing). As wellbeing is multidimensional, all four capitals are used – to a greater or lesser extent – to produce each domain of wellbeing. The four capitals are:

• Natural Capital: all aspects of the natural environment needed to sustain life and human activity

• Financial/Physical Capital: the country’s physical and financial assets that have a direct role in supporting incomes and material living conditions

• Social Capital: the connections between people and the values that underpin society

• Human Capital: people’s skills, knowledge, physical and mental health.

(Ormsby, 2018, p.3).

There is a fifth type of capital, cultural capital. The New Zealand Treasury proposes that cultural capital is an integral part of all four capitals.  “Culture is about how we socially interact, but also influences how we define knowledge, how we perceive and respond to our health, the way we value and care and interact with our natural environment and the ways in which we do business” (Frieling, 2018, p. 1).  The overarching question about where cultural capital is best placed within the Treasury Capitals Framework (i.e. as a separate capital or integrated across the other four capital) is currently left unanswered and requires further work (Frieling, 2018, p. 1).

The Living Standards Framework is primarily focused on developing an internationally comparable framework for intergenerational wellbeing.  While allowance is made for the framework to reflect issues of importance to New Zealanders (including the Treaty of Waitangi), the proposed framework does not specifically address Māori conceptions of wellbeing or explain how it will meet its Treaty of Waitangi obligations.

 One problem with universal application, that is apparent in the current framework, is that different peoples hold different meanings and understandings of what constitutes wellbeing, and these differences can sometimes be subsumed by the dominant, universalist paradigm (White 2016). This is particularly true for indigenous peoples around the world where parameters of their wellbeing tend to be defined on their behalf (COAG 2009; Jordan et al. 2010). 

Despite the recognition of the importance of culture in determining wellbeing currently no clear framework exists for the relationship between culture and individual and societal wellbeing outcomes.  Frieling (2018) in a recent discussion paper about social capital writes; ‘Unless government systematically accounts for social capital, social capital risks and opportunities are easily taken for granted or overlooked in policy development’.  We propose that this is also the case for cultural capital. 

In the associated discussion documents provided by The Treasury, the importance of culture as a factor shaping individual and societal wellbeing has been recognised throughout the work on the Living Standards Framework. For example, in their proposed indicator framework for measuring current wellbeing, King, Huseynli, and MacGibbon (2018) specifically recommended the addition of a cultural identity dimension to the Living Standards Framework for current wellbeing, which was adopted from the Organisation for Economic Cooperation and Development (OECD) (2011, 2013): “The inclusion of this dimension within the wellbeing framework recognises the importance of a shared national identity and sense of belonging, and the value of cultural, social and ethnic diversity. It recognises New Zealand is a multicultural society, while also acknowledging that Māori culture has a unique place” (King et al., 2018, p. 6).

The concept of a national identity as a measure of culture is inadequate and should be viewed as assimilative in its application.  When developing social indicators for wellbeing The Treasury along with other policy makers globally wrestle with the concepts of relevance and usability.   Relevance demands that we take on the inherent complexities of the idea of wellbeing as fully as possible, whereas usability, suggests that we try to shun complexities if we reasonably can.   Relevance wants us to be ambitious and equitable, usability urges restraint (Yap, 2016).  The suggestion of one national identity may be a quick response to measuring cultural identity (i.e. useable), but it is not relevant to the New Zealand context as it does not address Treaty of Waitangi obligations (protection, partnership and participation).

This can also be seen in the construction of the social capital indicators, which measure two types of social capital, individual and societal. Notably, the layers in between, whānau, hapū and iwi, which have been found as being so important to Māori identity and wellbeing, are missing.  For Māori, like other indigenous peoples globally, wellbeing starts from a relational perspective and centres around the wellbeing of the collective family or whānau, not just the individual (Durie, McCubbim et al. 2013). Rather than grapple with the relevance of this concept, the Living Standards Framework appears to omit any reference to the important of whānau in Māori wellbeing.

In New Zealand there is a legacy of Māori wellbeing research (notably Durie, Pere, Rangihau) that has provided a foundation for decades of Māori development and research, these are not including in the construction of the New Zealand Living Standards Framework.  In developing the Living Standards Framework, The Treasury has been charged with deciding ‘what objects are of value and the importance attached to the object or objects’ (Sen 1987). These two questions are deceptively straightforward but are critically dependent on how wellbeing is conceptualised and what theories of wellbeing that are included in the construction of Framework.  Indicator generation and selection is not purely a technical discussion, but very much one that is political in nature for indigenous and other marginalised groups, (Yap, p. 8,2016).

As Merry writes:

“Indicators are inevitably political, rooted in concepts of problems and theories of responsibility. They represent the perspective and frameworks of those who produce them as well as their underlying political and financial power. What gets counted depends on which groups and organisations can afford to count” (Merry, 2011, p 88).

The construction of the Living Standards Framework is a political process, that enables decisions to be made about where best to allocate resources. The decision by government to give attention to indicators is generally followed by policy action (Bache and Reardon, 2016, p. 6). 

For a more comprehensive discussion check out the discussion papers on The Treasury website.

Culture, Wellbeing and the Living Standards Framework: A Perspective, is a Discussion Paper which provides a perspective on how to better reflect culture in the Living Standards Framework (LSF). It was jointly commissioned by the Treasury and Manatū Taonga Ministry for Culture and Heritage; and written by Lincoln University economists Professor Caroline Saunders and Professor Paul Dalziel, working with Dr Catherine Savage (Ihi Research).

This paper is the first step in the process to better incorporate culture into the LSF and Dashboard. Key questions considered in the newly released paper include:

  1. What are the different dimensions of culture that matter for New Zealanders’ wellbeing?
  2. What would be the advantages and disadvantages of creating a fifth capital stock under the heading Cultural Capital in the LSF?
  3. What set of indicators and statistical measures should there be to monitor the contribution of cultural capital to future wellbeing?

This discussion paper is based on AERU Research Report No. 353 of the same title. 

The full references for the sources cited in this report can be found in this paper. A copy of the full Research Report can be downloaded at:

Posted 04 Jul 2019