Dialogue: Maharey recipe for investment

By COLIN JAMES

Who does the cabinet think is the most important visitor this week? Indonesian President Wahid, who is on the skids? Or Sir Tony Atkinson?

Sir Tony who? What's he got that warranted a meeting with the full cabinet on Monday afternoon, dinner with selected senior ministers on Monday night, a meeting with the Labour caucus yesterday morning - and star billing at a day-long seminar on Friday, at which Helen Clark will deliver "a vision for social democracy in New Zealand?"

"Third-way" social democratic weight, that's what Atkinson's got. He is one of Europe's leading social policy thinkers and Government advisers, especially on income distribution and poverty.

A former Cambridge University professor of political economy, with a glittering academic CV, he argues that alongside economic targets should be social indicators and targets - in household finances, health, education and so on.

Steve Maharey agrees. Who is Steve Maharey? Apart from being fond of fricative profanities, according to Christine Rankin, he is the only Labour minister to have put in the hard yards in search of a new theory of the welfare state.

Maharey's catchphrase is "social investment." The pseudo-economic allusion is deliberate.

He wants us to stop thinking of social spending as "wasted," a drag on the economy, and start thinking of it as we do investments in business and physical infrastructure - an investment in social development, in this case paying a dividend in the form of a more integrated, better-functioning society.

And he is being heard. Although Helen Clark has proclaimed "economic transformation" her Government's focus for the rest of this term, Maharey has got cabinet backing for what amounts to a defining initiative for this Government.

What really counts, this line goes, is not captured by gross domestic product figures alone but by "social inclusion" - whether all of the population fits in and contributes.

We hear about the opposite, "social exclusion," daily in our news media - malingering, mayhem, muggings and murders. The political right measures it in "dependency" numbers on benefits.

Drawing on Atkinson's writings, Maharey argues that an inclusive society doesn't just feel better, it does better economically. Moreover, Atkinson is music to Maharey's and Clark's ears because he argues against targeting (as inefficient) and for universal pensions and benefits.

A raft of papers in this vein is emerging from the Government, starting with a broad-brush Pathways to Opportunity booklet last week, claiming to shift the focus from work-for-the-dole to getting people into "real" jobs and including a promise that refusing "suitable" jobs will cost people their benefits.

The Treasury is to publish an "inclusion" document, and the Ministry of Social Policy (Atkinson's host), will issue on July 3, a first-cut "social indicators" assessment of the social state of the nation, the better to develop social research and policy and target "investment."

Ho-hum, another report. Except that Maharey has got his colleagues signed up to an annual review of progress as measured by his indicators.

Or regress. Maharey is about to make the Government hostage to potentially negative evidence, bad media and juicy pickings for political opponents.

But, nothing if not earnest (for all Rankin's teddy-boy allegations), Maharey is aiming thereby to "change the nature of the debate," to focus on what needs to be done rather than what is failing.

Atkinson's relevance is that he heads a group devising a European Union programme to "benchmark" countries' social inclusion against each other and devise yardsticks and mechanisms by which they can level their performance.

How does this fit with "economic transformation"?

Clark has insisted the Knowledge Wave conference she is co-hosting in August with Auckland University Vice-Chancellor John Hood adds social cohesion (and delegates to match) to innovation, economic strategy, education, entrepreneurship and cooption of Kiwis abroad.

This broadening of focus risks dissipating not only the knowledge wavers' energies but also, longer-term, the Government's.

But, then, a social blueprint, not economic wizardry, is what, deep down, this Government is actually about.

* ColinJames@synapsis.co.nz