The annual World Happiness Report, which ranks 156 countries based on factors such as income, social support, life expectancy, and freedom to make life choices, saw New Zealand slipping several places in 2023. But why?
Known for its picturesque scenery, friendly people, and high quality of life, this new ranking came as a surprise to many. Making the top ten is in line with expectations, but New Zealand ranking tenth is not. New Zealand hasn’t had a double-digit World Happiness Report result since 2013, when we ranked 13th. Since then – between 2014 and now – it’s been a ranking of seventh, eighth, or ninth. How come we are slipping now?
It’s important to note that these rankings are based on aggregated data and won’t reflect the experiences of every individual within the country. The World Happiness Report is just an indication of happiness. The report is the annual publication of the United Nations Sustainable Development Solutions Network. It ranks countries based on various factors, including GDP per capita, social support, life expectancy, freedom to make life choices, generosity, and perceptions of corruption.
Economy
The first major happiness-impacting issues facing Kiwis are purely economic. The country has witnessed a slowdown in economic growth in recent years – a trend further exacerbated by the global pandemic. All things considered and compared to other nations, the New Zealand economy recovered quickly from the COVID-19 shock though, thanks to effective virus containment, measures to support businesses and households, highly expansionary macroeconomic policies, and the rollout of vaccines.
New Zealand’s GDP rose 2.4 percent in the first quarter of 2021, a significantly larger increase than the global average of 1.8 percent. Per Stats NZ, real GDP growth reached 3 percent across 2021, with the services industries leading the recovery. However, the year ended with a decline in employment and a fall in the labour force participation rate, likely due to temporary factors related to the pandemic. However, this, along with a decline in investment and tightening of monetary policy by the Reserve Bank to control inflation, resulted in an overall mixed economic response to the pandemic. Real GDP growth slowed to 2% in 2022, as high inflation and rising interest rates weighed on private consumption and investment, per OECD reports.
The emotional toll of the pandemic is tragic and ongoing, goes without saying, and is more important than the economy. The economy was still impacted, though, and its flow-on effects led to further emotional burdens. Although governments have been proactive in launching various economic stimulus packages to counter these challenges, many businesses continue to struggle post-coronavirus. This financial downturn impacts people’s job security and financial stability, contributing to increased stress levels among New Zealanders.
The dust relatively having settled post-coronavirus, in 2023, the New Zealand economy contracted in the last quarter of 2023, with a 0.1 percent fall in GDP and a 0.7 percent decline in per capita terms. This contraction followed a 0.3 percent fall in the September 2023 quarter, marking the first back-to-back quarters of contraction since 1995, per Stats NZ. Looking ahead, real GDP growth is projected to slow further to 1.1 percent this year before recovering to 2.5 percent in 2025, as per International Monetary Fund predictions. The average Kiwi sees the economic situation as bleak, but hope remains. Time will tell.
Housing
The housing crisis is another key factor weighing on the wellbeing of New Zealanders. Over the past few years, there has been a significant surge in property prices across the country; the median house price is projected to be $1.0m by 2030, making homeownership a distant dream for many. This puts a strain on renters, too, as rents have also climbed sharply. The root of the problem is that demand is outpacing supply due to land availability, increasing costs, and an affordability crunch, to name a handful of reasons. The housing market is projected to grow by 3.12 percent from 2024 to 2028, but this growth is not expected to alleviate the affordability issues. As demand for housing continues to outstrip supply, many individuals and families are finding it increasingly difficult to afford suitable accommodation.
The lack of affordable housing options contributes greatly to dissatisfaction. The housing crisis has significant mental health impacts on families struggling to afford housing. Beyond this, the crisis is hindering economic growth and productivity by limiting the availability of affordable housing for workers. Some are forced into homelessness. The number of people living in cars, motels, or overcrowded situations is rising. This overview only scratches the surface and focuses on the bad. Sure, some measures are slightly helping: increasing supply, tax tweaks, and social housing being three. But as the government sways right to left and back again, legislative changes face stop-and-start hurdles. Many Kiwis are spending a significant portion of their income on housing, leaving less for other necessities. This is a drain. The intergenerational divide is the long-term drain; it’s harder for young Kiwis to get on the property ladder. An extension of economic issues, the housing crisis means unhappier New Zealand.
Climate Change
Climate change remains one of the most pressing issues facing the world today, and it’s especially pertinent for clean, green Aotearoa, integral to our national identity. Climate change can lead to feelings of helplessness, anxiety, and despair as people witness the changes in their environment and the impacts on the natural world. And changes are expected to increase in the future. Higher temperatures, increased flooding, and more frequent droughts and wildfires are already being observed (Motu Research, NIWA, Royal Society of NZ). These changes affect the wellbeing and things that matter most to people in their lives.
As NIWA notes, environmental changes, such as higher temperatures and more frequent extreme weather events, can disrupt people’s lives and livelihoods. This can lead to stress, anxiety, and reduced quality of life. Climate change can lead to an increase in the spread of tropical diseases, such as dengue fever and malaria, as New Zealand becomes warmer and more suitable for these diseases. This can have serious consequences for public health and wellbeing. Per Motu Research, changes in the climate can disrupt agriculture and other industries that are crucial to the economy. This can lead to job losses, reduced income, and financial stress, so unhappiness.
New Zealanders have a diverse range of views on climate change. However, there is a clear trend towards increasing concern and awareness about the issue. A recent Centre for Strategic and International Studies (CSIS) survey found that 100 percent of New Zealanders are aware of climate change, and 81 percent are concerned about it. The survey showed there’s also strong support for action to address climate change, with 76 percent of New Zealanders believing that individuals can make a difference, 62 percent believe that the government should do more to address the issue. Implementing policies to reduce greenhouse gas emissions, invest in renewable energy, and protect natural habitats can help mitigate the impacts of climate change and promote a healthier, happier future for New Zealanders.
Work-Life Balance
Forbes ranked Auckland fifth globally for work-life balance early in 2021. In June 2023, Remote.com ranked New Zealand first in the world for work-life balance. New Zealanders generally report high levels of satisfaction with their work-life balance; expats notably come to Aotearoa enticed by employers who recognise the importance of employee well-being. Despite the overall positive picture, some concerns have been expressed about the potential for overwork in certain industries, which could negatively impact work-life balance.
The pandemic has likely added complexity to work-life balance, with potential changes in work patterns and increased stress levels. Not every workplace can feasibly offer flexible work hours or locations, as two examples. Generation Z, in particular, also demands this flexibility, which coronavirus proved to be possible. These teething issues take time for employers and workers alike to recover from.
In general, long hours, high stress levels, and a lack of time for leisure activities can negatively impact personal well-being. Many modern professionals face increasing demands on their time and a decrease in job security amid ongoing economic pressures, possibly affecting the overall work-life balance—a crucial element for maintaining happiness.
Getting Honest
As mental health awareness increases globally, more people are recognising and discussing their emotional wellbeing. The stigma surrounding mental health issues is gradually diminishing, making it easier for people to seek help when needed. While this heightened awareness is undoubtedly a positive development, it may also lead to more people reporting feelings of unhappiness compared with previous years. As such, mental health statistics are finally close to reflecting reality – but it isn’t a happy reality at that. Stats NZ data showed a significant increase in the proportion of people with poor mental wellbeing, up from 22 percent in 2018 to 28 percent in 2021.
The Internet offers us connectivity and has opened doors for discussing mental health and happiness. Digital spaces mean we can anonymously talk about our feelings and find others who relate. You can guess where this is leading, though: the Internet can be awful. As for impacting Kiwis’ happiness, key concerns include security and privacy issues, increased screen time and digital reliance that reprograms young brains and how they find happiness, concerns about harmful online content and misinformation, and the potential for online addiction. The impact of the internet on happiness in New Zealand will depend on how these issues are addressed. Effective internet regulation, improved affordability, and addressing online harms will be crucial.
While many probable reasons exist for New Zealand’s lower ranking in the 2023 World Happiness Report, it’s essential to address these underlying factors to improve life quality and wellbeing across the nation. When we look to the rest of the world, New Zealand does have it great, but there will always be room for improvement.