Government response to the NZ Institute's kick-in-the pants assessment will be telling

If Kiwi parents want their kids to grow up in a more equal society where they have a good chance of getting a job and making it through the tough times without falling prey to youth suicide they have a choice: Go to Australia or take up the New Zealand Institute's challenge to do something about it.

The NZ Institute's inaugural "NZahead" report card delivers a much-needed kick in the pants to Kiwis at all levels.

Institute director Rick Boven has graded New Zealand a C. "Could do better." But judging by the substance of this report he is is being too kind.

With NZ scoring a D on seven of the institute's 16 metrics - three economic measures (innovation and business sophistication, labour productivity and household wealth); two social measures (inequality and assault mortality) and two environmental measures - Boven should have awarded a C minus "must do better or fail" warning.

The institute has used cold hard metrics to puncture many of the deeply held myths New Zealanders hold about this country. The rankings in its report card makes it brutally clear that New Zealand is hardly the best place in the OECD to "have a family".

Nor is it any longer a society where Jack is as good as his neighbour.

Frankly, the metrics the institute has dug up on this score are deeply shocking and suggest that unless there is a co-ordinated response from Government at central and local levels, many more Kiwis will find themselves compelled to look outside NZ to build their futures - particularly in Australia.

The institute's report card is not all bad news.

New Zealand scores slightly higher than Australia when it comes to the environmental metrics that were measured. Our ranking for educational achievement, which was fourth out of the 24 countries measured, also out-classes Australia, which happens to be a beneficiary of many of our graduates.

But life in Australia is clearly streets better for its countrymen than the social climate here, as is shown by NZ's rankings on key social measures: life expectancy, unemployment, inequality, assault mortality (basically murder) and youth suicide.

The most critical issue is the outlook for our young people.

The problem is that even before the global financial crisis exacerbated the 2008 recession, our future workforce faced considerable pressure.

Most concerning for the future for our youth (15-to-19-year-olds) is the particularly high level of youth unemployment and the persistently high rate of youth suicides.

On the institute's rankings, New Zealand ranked at 29th out of 30 OECD countries for the proportion of unemployed who are 15 to 19. Over 20 per cent of this age bracket are unemployed. The situation for 20-to-24-year-olds is marginally better, with just 10 per cent of that age bracket unable to get work.

The institute notes that in New Zealand, young people make up a very large proportion of unemployed people.

Almost 30 per cent of the unemployed in New Zealand are aged 15 to 19, compared with about 12 per cent for OECD countries on average. About 40 per cent of New Zealand's unemployed are aged between 15 and 24.

The institute's authors acknowledge the Government's Youth Unemployment Package which was introduced last August. This $152 million programme aims to create about 17,000 job opportunities for young people over the next two years.

The package promises 4000 new tertiary training places for 16- and 17-year-olds. In addition, it pledges 4000 job placements of six months for low-skilled young people in businesses and about 4000 of up to six months in community programmes.

As the authors note, the package was justified by claiming it is important young people do not become completely detached from the world of skills and work. The intention was to make sure New Zealand does not risk diminishing the potential of a generation of Kiwis whose work opportunities have been affected by the recession.

But creating just 17,000 job opportunities when so many of our young people cannot find work leaves far too many of them marginalised.

The institute could have been far blunter on this point, but has soft-pedalled the outlook for this century's lost generation.

This is unfortunate as burgeoning youth unemployment will add emotional pressure for those young people who seek validation through work.

While the report indicates the NZ youth suicide rate has declined from the peak in the mid-1990s, the rate for 15-to-19-year-olds is still the highest in the OECD, declining from about 15 per 100,000 in the 1990s to 11 per 100,000 in 2007.

Notably these metrics were taken before the 2008-2009 period in which youth unemployment skyrocketed again to the levels of the early 1990s recession.

Prime Minister John Key - who talked of a burgeoning underclass while in opposition - must not ignore this report.

Neither should his Social Development Minister Paula Bennett.

If the May 20 Budget does not expand the youth opportunities programme, hard questions must be asked.

Not just by families who will have to deal with the impact on their demoralised teenagers, but also by employers who will have to grapple years later with younger employees who have not been socialised into the workforce at the appropriate age.

Key made great political capital out of the widening gap between New Zealand and Australia while he was in opposition.

But he blatantly ignored the recommendations of the Don Brash-led 2025 taskforce which it believed would help to close the GDP per capita gap between New Zealand and Australia.

The NZ Institute's report card cannot be dismissed as ideological.

But there is an underlying message which is difficult to deny.

If Key needs any encouragement on this score, he should look to the institute's overall assessment of New Zealand's response to the recession which it says has been "remarkable in some ways".

"Average hours worked per week in New Zealand reduced from 35 to 33, reflecting what could have been a 4 per cent increase in unemployment but instead was shared across the workforce. Many businesses are making efforts to avoid making workers redundant by reducing working hours.

"Businesses are motivated partly by a desire to look after their workers and partly by wanting to retain capacity and capability to grow again once economic conditions improve.

"A nine-day-fortnight scheme was introduced by the Government to abate the impact of the global economic turmoil which New Zealand businesses and their employees faced. The job-support scheme was initially aimed only at private-sector businesses with 100 or more employees. Uptake within the programme was limited, but the evidence discussed above indicates businesses may have adopted the idea independently. Government also introduced the Restart programme which is a package of payments, employment and job services to help people who have recently been made redundant from full-time work."

The problem is that much of the NZ response was geared to those already in work. The emphasis has to switch.

The National-led Government's response to this report card will be telling.

In 2001, the leading proponents of the "catching the Knowledge Wave" conference tried to persuade Helen Clark's Government to sign up to a "balanced scorecard" for New Zealand.

The targets were to cover economic growth, establishment of a knowledge society, talent development, social cohesion and environmental health.

But despite massaging the card to fit in with the then-Government, Clark ultimately would not play ball.

The institute's membership comprises many of those who led the Knowledge Wave bandwagon - let's hope this more independent approach bears fruit.