Agencies that spend $34 billion worth of public money each year face a big upheaval as new State Services Minister Paula Bennett rolls out an "investment approach" from the welfare system across the rest of the public service.
Ms Bennett's promotion to fifth place in the new Cabinet, in charge of one of the Government's three key coordinating bodies, the State Services Commission, is a sign that senior ministers want to get better efficiency across the whole public service in the same way that Ms Bennett has driven it through her welfare reforms.
In welfare, her "investment approach" calculated the average lifetime costs of every person who went on a benefit, then shifted staff efforts into those with the highest likely lifetime costs.
That meant pouring resources into "wraparound" support for the most at-risk groups such as for teen parents, who cost taxpayers an average of $246,000 in their lifetime, while giving less support to unemployed jobseekers who cost an average of only $116,000.
Ms Bennett, who also gets an associate role with Finance Minister Bill English, said her new jobs would let her take a similar approach more broadly.
"I definitely think we need some reform in state services and in how we are doing cross-agency work, which you can only do to a certain level within a portfolio. So State Services gets me to oversee and overlook all of it," she said.
"And both Minister English and I have the intention of rolling out the investment approach wider than just Work and Income. You can see how it fits particularly with those children who are most vulnerable across all different agencies. We're talking about the same children. If we know who they are earlier, then we're willing to invest more for that long term gain, both for them as far as what they can achieve in life and it always makes sense as well balancing the books."
The reshuffle coincides with a Productivity Commission inquiry into "enhancing productivity and value in public services", ordered in June by Mr English and outgoing State Services Minister Jonathan Coleman.
The commission has published an "issues paper" today asking for public feedback on how the Government should drive better productivity through the way it buys social services worth $34 billion a year from state departments, district health boards, schools, early childhood and tertiary education providers, the Accident Compensation Corporation and more than 4000 non-government organisations (NGOs).
NZ Initiative director Dr Oliver Hartwich said the investment approach could justify putting more resources into higher quality teachers in low-decile schools to help their students get better jobs in future, or into child health services to reduce future costs when those children grew up.
Council of Christian Social Services executive officer Trevor McGlinchey said all agencies needed to work together more, but he warned against dividing them again by tying service contracts to outcomes in only one policy area, such as an employment support contract tied to getting sole parents into work but ignoring the value of parental involvement in early childhood education.
"Government wants to look at things with a wider lens, and wants to think about how Education, Health, Social Development, Corrections etc all work together to produce greater social wellbeing," he said.
"But an outcomes focus unfortunately tends to reduce that back to a more siloed approach. You have to be able to think beyond those siloes and into how organisations work in their communities for greater wellbeing."
• Average lifetime cost of each teen parent: $246,000.
• Average lifetime cost of each jobseeker: $116,000.
• Conclusion: Shift welfare staff away from jobseekers to provide "wraparound" support to get teen parents back into education, and eventually work.
On the web: www.productivity.govt.nz.