Living Standards Series: Discussion Paper:18/05, July 2018

The decentralised and siloed nature of much of New Zealand’s risk management means that insufficient attention is paid to the interconnectedness and cascading nature of risk factors. A more proactive, coordinated and evidence-based approach to risk management and resilience building is required to maintain societal resilience and sustainability in the face of the complex risks we are facing domestically and globally.

Because of the cross-cutting nature of risks, cross-government coordination is key to strengthening our overall resilience. A national framework of primary risk factors for New Zealand, together with a cross-government, future-focused agenda for resilience building, can offer an integrated system for determining resilience objectives, setting targets, action and evaluation measures.

The Department of the Prime Minister and Cabinet (DPMC) has started work in this direction and is developing a National Risk Register for New Zealand. DPMC has identified at least four categories of long-term trends (environmental, societal, economic and technological) that influence the risk landscape for future wellbeing. This paper provides a first exploration of how these four overarching trends influence the risk landscapes for the four capitals in the Treasury’s Living Standards Framework (LSF): natural; economic; human; and social capital.

This paper is meant as a starting point for an open conversation between risk practitioners and policy-makers across government, as well as iwi and Māori community representatives, researchers across different disciplines, think tanks, not-for-profit organisations and wider civil society representatives, on how to better incorporate risk management and resilience building into public policy. Ultimately, the identification of risk and resilience factors for each of the four capitals will help policy analysts better evaluate policy proposals against risk and resilience factors for sustainable wellbeing.

The paper is part of a series of discussion papers that the Treasury will issue this year. At this time, papers are also being released on financial/physical capital, Māori wellbeing, Pacific peoples wellbeing and the sustainable development goals in the context of the LSF. The papers start the conversation and should be seen in that light. We highly welcome feedback from readers on what is proposed, including the identified risk and resilience factors for each of the capitals as well as reflections on the proposed institutional context for better risk management and resilience building. (Executive summary).

For more information on Treasury's approach to the Living Standards Framework, access the website. Record #5933