The 10,000 most vulnerable people in New Zealand cost the Government $6.5 billion over their lifetimes, Finance Minister Bill English says.

This group of people were on long-term welfare, had welfare-dependent children, were serving sentences in jail or in the community, and had children in the criminal justice system.

Mr English cited the $6.5 billion figure in a speech at the Third Data Hui in Wellington this morning to underline why the Government was increasingly taking an "investment approach" to social spending.

"Those 10,000 people have very challenging lives, and a lot of the Government programmes haven't had much impact on changing their lives," Mr English said.


"And we've got to work out better ways of having an impact on them."

Under the investment approach, the Government was analysing large datasets to identify where up-front spending could cut costs later.

So far, it had mostly helped the Government "weed out dumb ideas" which "looked good" but could not prove they would make any tangible difference to at-risk people. It was also helping to inform some of the Budget spending to be announced next month.

Mr English said failed social programmes not only wasted money, they also wore down the resilience of the people in the programmes.

He told the hui that the Government planned to have a system in place for sharing data with NGOs by the end of the year.

The Government needed to "break the habit" of holding on to data which could be used to help vulnerable New Zealanders, he said.

"The public might be a bit surprised at how difficult it is for the nurse and the policeman and the doctor and the teacher to know what's going on with that small proportion of kids in that community who are really at risk.

"We are trying to ensure that they can know what's going on so we can act more effectively to protect those kids."

Creating a data-sharing system, which Mr English described as a "data supermarket", would require careful decisions about privacy and security.

"The hard bit is how you get information that can be used by a Plunket nurse or a social worker out in the street about particular families and particular houses and particular needs.

"That's where we need to get much clearer about what our rules are so that we can deliver better services but people can feel confident that their data is being used appropriately."

Mr English said the only way to care for the most vulnerable people in the community was to identify them by household and, with their consent, work closely with them. But this did not necessarily mean reducing privacy or confidentiality rules.

"We are talking about getting really clear about the rules and enabling a range of organisations to use the data when it's safe."