By Michael O’Brien and Susan Kemp –

If social investment is the next (or perhaps current) big policy idea (as some commentators seem to suggest), then it requires some very careful review and discussion what it is and how it is designed to work. The new government has indicated that it plans to review the idea and the approach; some of the issues and questions are taken up below.

The New Zealand approach has been described by the former Prime Minister (when he was Finance Minister) as follows: “We are prepared to spend money now to secure better long-term results for the most vulnerable New Zealanders, and lower costs to the government in the future. We call this social investment.”

Briefly, as has been developed until now, social investment uses a range of information from government agencies to identify the link between a set of identified risk factors in early experiences with poor outcomes in later life. That statistical link is then drawn on to identify the ‘at risk’ population and services and programmes are targeted on this population with the aim of improving outcomes for those individuals and families. Those individuals and families will be identified because, statistically, they are ‘at risk’. As the Minister stated on different occasions assistance will be provided to them ‘one by one’ in order to create improved outcomes.

This all seems simple, straight forward and uncomplicated. Who, after all, would not want improved outcomes? However, as with many policy plans and proposals, the process and answer is much more complicated than this simple question suggests.

First, the statistical links between the risks and the outcomes is not linear and has not been established as being causal – statistical links do not mean that the risk causes the outcome. Analysis of the work thus far on the statistical links between risk and outcome shows that: (1) a high percentage of those with high risk don’t have poor outcomes; (2) a high percentage of those with poor outcomes don’t experience the risk factors; (3) it is highly likely that a third common factor might underlie the statistical link, namely poverty. Certainly, examination of the geographical distribution of risk factors shows a very high congruence between those parts of the country with high risk factors and those parts of the country with the highest levels of socio-economic deprivation. The current approach to social investment means that poverty is treated as an individual failing, not as a function of how income and wealth are distributed. One of the significant effects of the lack of clear statistical link between high risk and poor outcomes is that many of those who need services will not receive them and many of those who receive services will not need them – contrary to the assertions, social investment does not look like a very efficient use of public expenditure.

Second, the New Zealand approach to social investment is very heavily targeted at quite specific individuals and families, those who are identified as ‘at risk’. This is in marked contrast to the way that social investment has been approached in many other countries where social investment is given a very wide and comprehensive approach in which government and public expenditure is focused on such areas as expanding employment and education opportunities across the whole population, the provision of educationally focused childcare programmes, social protection and what is described as ‘social inclusion’. This stands in marked contrast to what has been the New Zealand approach.

One of the major unanswered questions about the New Zealand approach is that it is an approach which creates stigma and increases the extent to which government, state agencies and government funded organisations ‘supervise’  those ‘at risk’ individuals and families. The local and international experience of individually targeted programmes is that the stigma which results from targeting leads to low levels of participation and low take up. Many of those who are eligible for assistance do not apply or, as recent discussions on benefit support have illustrated, they are not told about the assistance to which they are entitled.

The narrow social investment focus on ‘big data’ prioritises statistical information above all other information and evidence. In particular, the qualitative evidence about what is needed to ensure successful outcomes and effective interventions (about which there is a good deal of international material) is ignored because it cannot be statistically measured. Effective intervention in individual, family and community life is built around relationships, relationships which cannot be reduced to numbers.

I have said nothing here about privacy issues –they are an important question in their own right and have already received careful attention from the Privacy Commissioner. But there two other core questions that need careful discussion: What does investment mean for those whose outcomes don’t improve? Does that mean that the services will not be provided, that they will be subject to even more extensive oversight and supervision? These are critical questions that are much more significant than simply being part of the social investment framework. They go to the heart of what kind of society we are and what we are trying to create and how we regard and treat our fellow citizens – are some to be ‘excluded’? These questions are too big for a discussion here but they certainly require substantial debate and serious consideration.

What are the implications of social investment for non-government organisations (ngos)? If contractual funding is to be linked to these groups meeting government established outcomes, do they then become as one commentator has suggested ‘little fingers of the state’, effectively government agencies in all but name? Do they lose their independence and a core part of their raison d’etre? In the context of social investment, their relationships with government and with the state and their ability to work to their own kaupapa and mandate also require substantial discussion.

There are, then, many significant questions to be explored as the new government reflects on how it will approach ‘social investment’. The answers to those questions will shape our society and its citizens in a range of ways; they warrant careful debate.

Michael O’Brien is an associate professor of Counselling, Human Services and Social Work in the Faculty of Education and Social Work at the University of Auckland.

Susan Kemp is a professor of Counselling, Human Services and Social Work in the Faculty of Education and Social Work at the University of Auckland.


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