It also leads the world in water and sanitation thanks to infrastructure giving remote places access to fresh water.
But when it comes to environmental quality there is a black mark, as New Zealand's ranking of 21 is dragged down by high greenhouse gas emissions and failure to protect natural habitats.
"Australia and New Zealand are some of the best places in the world to live. And while they've achieved similar results this year, each has unique opportunities to improve quality of life for their residents and the imperative to learn from their neighbour's success," said Social Progress Imperative chief executive officer Michael Green.
The global survey sees New Zealanders enjoying better opportunities than Aussies - but only marginally.
It says across a range of measures that assess residents' opportunity to make personal choices and reach their full potential, New Zealand arguably registers its most impressive set of results ahead of Australia. It ranks as the fourth most tolerant country in the world, partly accounted for by being the most tolerant place to live for religious minorities and immigrants.
New Zealand is also praised for turning economic growth into social progress, performing better than many other countries with higher gross domestic product per capita such as the US and Germany.
In contrast the world continues to under-perform on social progress compared to what average GDP suggests is possible. Many countries are still failing "egregiously" to provide access to piped water, sanitation, education and adult literacy.
"We have the resources to do better. The main problem is the inequality in wealth between rich and poor nations. Global aid flows are not sufficient to help the poorest countries to provide these basic needs for all," Green said.
"Greater income can easily and positively influence a country's social progress performance in more than half of the areas measured on the Social Progress Index. But getting richer simply won't move the needle far enough; the most stubborn challenges need innovation and other creative interventions, making social progress achievable by even the lowest resourced countries."