National social investment fund could allow wealthy New Zealanders, charities and philanthropists to support welfare system

National's spokesperson for Finance, Nicola Willis. Photo / Greg Bowker

National has proposed a new social investment fund to assist the most “disadvantaged citizens” which wealthy New Zealanders could eventually donate into.

Social investment as a concept originated under National's former finance minister Sir Bill English as a targeted approach to welfare, which drew on Government data to assist those most in need and at risk of needing long-term state support as early as possible.

Finance and social investment spokeswoman Nicola Willis, during a speech at Victoria University School of Government said National was committed to "bring social investment to life" if elected next year.

Early examples of National's social investment approach included the Healthy Homes scheme, started in 2013 to improve housing for families most at risk of developing rheumatic fever.

On taking office in 2017 Labour kept some elements of social investment, including massively expanding the Healthy Homes scheme, while shifting to a more universal welfare system.

Willis said recent positive results from a Healthy Homes survey showed the "success story" of the social investment approach.

She said Labour's broader approach to welfare overall had led to a "growing gap between spend and impact".

It ended up with multiple agencies working with the same people but not addressing the root of the problems.

"For frontline workers and delivery agencies this approach can lead to 'contract spaghetti'," she said.

"Multiple output-oriented contracts slicing up social challenges and losing sight of the wood for the trees, losing sight of the individual families and people we are meant to be helping."

Willis said these issues were evident in the current "bleak picture" of society.

"Kids ram-raiding shopping malls, thousands of families living in motel rooms and cars, soaring truancy rates, rapidly rising gang membership, declining rates of literacy and numeracy achievement, more children growing up in benefit-dependant households. It goes on."

Willis said National's social investment approach would identify, fund and scale up the actions that will have the most positive impact on people in the long run.

"It will make use of sophisticated data and evaluation approaches to identify what works and, crucially, what doesn't."

It will include establishing Social Investment Fund, initially supported through the Government Budget process.

It would be topped up each year, including by redeploying funding from any Government initiatives that may have received disappointing social impact evaluations, she said.

"I can imagine, for example, a National Government might deploy the Social Investment Fund to tackle the task of delivering secure, sustainable housing for people currently living for extended periods in emergency housing."

Willis said she also hoped the fund would be so effective New Zealanders could choose to invest their funds with it.

"There could be huge power in combining the forces of Government social investment experience with the capital and expertise of the philanthropic and charitable sector.

"I want results. If private capital can be better deployed to help change the lives of more New Zealanders, then I will not be afraid to use it. The next National Government will be focused on doing what works."

Willis said if private capital could be better deployed to help change the lives of more New Zealanders then she would "not be afraid to use it".

Willis said their approach would use "Integrated Data Infrastructure", or IDI, a large New Zealand-based research database with information on citizens from across ministries and departments.

“It provides us with an enormous opportunity to predict which Government activities are most likely to be associated with better outcomes for children, what factors might indicate the highest need, and to scientifically evaluate the effectiveness of Government programmes.”