• Jenesa Jeram is a policy analyst at The New Zealand Initiative.
Imagine if the Government only saw us as dollar signs, where every government service we use increases that number and the taxes we pay reduce it. And the Government's only responsibility was to decrease those dollar signs looming over our heads.
In such a world, our triumphs and tragedies are reduced to data points and fiscal liabilities. The task of understanding the complexity of our lives is placed into the cold hands of data scientists.
According to some, this was National's approach to welfare. Known as the "actuarial measure", it is the most innovative and controversial component of National's social investment approach to welfare.
With a change of government, experts have been near unanimous: keep social investment but ditch the actuarial measure. Labour appears to be taking heed, indicating they will preserve the social investment baby and throw out the dirty fiscal liability bathwater.
At the same time, overseas experts are now looking to adopt New Zealand's actuarial measure to improve their own welfare systems. So has our Labour-led Government missed a beat?
The case for keeping the actuarial measure needs to be heard.
The actuarial measure is a tool. It can be in the hands of data scientists to design policy, or in the hands of people on the ground so that they can confirm or challenge the numbers. It is just a tool.
Most importantly, it is a tool that can be implemented in a way that is entirely consistent with Labour's overall approach.
The actuarial approach assesses the predictable fiscal risks of people with different profiles. By calculating how much individuals with different risk factors are likely to cost the welfare system, a government can target services to reduce that liability.
But measuring fiscal liability is not primarily about cutting costs. Nor is it about reducing our colourful and intricate lives to dollar figures. It is about highlighting and understanding the complexities that lead to those figures.
I'm no accountant, but the actuarial approach seems a rather expensive and convoluted way to save money. And a government does not need a 100-plus page report to remind it that welfare beneficiaries cost money.
Perhaps counter-intuitively, the most valuable outcomes from applying the actuarial measure are not the big fiscal numbers churned out at the end. The juiciest part of those chunky actuarial reports is how the numbers are reached.
The actuarial reports can reveal what has been out of sight, or affirm what has always been in plain sight but where government action has not been effective.
The actuarial reports remind us of the costs of getting public policy wrong. More needs to be done to help young people receiving benefits gain independence. In fact, 75 per cent of total liability for those in the benefit system is attributable to those who first entered the system under the age of 20.
While Labour and National agree that early intervention is important the actuarial reports can measure its effectiveness.
More also needs to be done to ensure the Government is not writing off entire groups of people as "too hard". Consider beneficiaries with a history of criminal convictions. Those who have committed a crime leading to a sentence incur an average future lifetime liability that is $37,000 higher than those without that history.
The $37,000 increase in lifetime liability isn't just a cost to the Government, it represents an extraordinary waste of human potential.
Policymakers should be looking at what unique barriers to jobs challenge people with criminal convictions. The actuarial measure doesn't just tell us which groups are likely to be most costly to the state, it can also reveal which groups might have been neglected by government policy.
High fiscal liabilities are not a failure of the individual, but a failure of government to help them into independence. And the actuarial measure need not lead to punitive welfare policy. Forcing people into jobs they are not suited for or that are unsustainable will not reduce long-term fiscal liability. Treating beneficiaries like liabilities does not reduce fiscal liability.
Of course, the actuarial measure does not reveal everything policymakers need to know. Critics argue it would be best to dump it for a range of well-being measures. That is like saying a builder should dump her screwdrivers because she already has a hammer.
The Government needs both well-being measures and actuarial measures to track its progress and highlight what it has neglected.
The actuarial measure might be a tool inherited from National but Labour has the opportunity to build an even better welfare system.