As he did during the long recess last year, Bill English has just been in Australia explaining his radical “Social Investment” approach to social spending.

It appears that there is widespread interest in the New Zealand approach to being prepared to spend more at the start of someone’s encounter with social services to reduce the total sum spent over the person’s lifeline.

But as English admitted in Australia the approach now faces some difficult challenges.

He wasspeaking  (behind closed doors) to the Centre for Independent Studies and to the Australia and New Zealand School of Government’s annual conference.

But previewing his speeches in an interview on the ABC’s Radio National at the weekend he offered one of the most precise definitions he has offered so far on the thinking behind  social investment.

“Whatever shorter-term measures that government might take to contain spending, in the longer term the ideal way to reduce or contain government spending is to have less need for it,” he said.

And that is the essence of social investment, to ultimately reduce the demand for the Government’s social services.

But doing that involves a rejection of much of what the social agencies have been doing, and English has sown a strong willingness to make the provision of many Government services contestable and thereby bringing in non-governmental organisations to essentially compete with Government departments in the provision of those services.

“Much of Government spending is dealing with past failure, with poor decisions with programmes that claimed a lot and didn’t work,” he said.

“We are creating a whole new set of tools that enable us to be much more discriminating about where spending is effective because where it is effective, it is worth spending a lot.


“For example, the work we have done on vulnerable children shows that we have a small number of children who will cost $1 million by the time they are 35 and probably beyond that they will be in our welfare system for another 30 years.

“So when you see that you can’t help;p but feel a moral obligation to more for those six or seven-year-olds because you know whatever the cost is, it represents a life of misery.”

But English had to admit that the social investment approach is still far from producing radical results.

“of all the people who went on a welfare benefit in New Zealand last month, over 70% of them have been on a welfare benefit before so this whole approach that we are taking shows us exactly that phenomenon that the traditional measure of getting people off welfare benefits fall short.

“Someone simply exiting a benefit is only half the story.

“The other half is whether it is a sustainable exit and we don’t know a lot about how to sustain the exits because in the past it hasn’t been something the public service has focussed on.

“Now that is becoming the next generation of what we do.”

And that means focussing on the sustainability of employment for people who have come off welfare.

“of all the large amount of money that is spent getting people off welfare and into work we need more of it re-directed into sustaining people in employment where we get the right situation which is likely to lead to them sticking in the workforce.

“That means often taking account of their housing situation; their problems with debt and other social issues that may be in the family.

“We are finding that sustaining employment often requires a more integrated package from Government and w have got some programmes that are up and running that are outside our Government departments and are more integrated, and we are staying to get some really positive results from that.”

What English was talking about was a subtle refocussing of the Social iNvetsment programmes. Now he is talking about making employment sustainable to make being off welfare sustainable.

That may be a hint as to what the focus of the social policy part of the next Budget is all about.