Nerd Sunday: National's social investment approach. Is it less boring than you think?

There’s an election coming up. I can tell because politicians are behaving like a cat does when you move the furniture.

Middle aged campaign managers are shaking shit up with their sassiest memes, before hastily deleting them in response to copyright concerns. The Prime Minister looks tired, as if she’s thinking, ‘Clearing up after a preschooler is enough, not five ****ing million of you’. And the leader of the Opposition resorted to singing an awkwardly staged rendition of Bills for the media - prompting LunchMoney Lewis, the song’s writer, to gently say, ‘He did the best that he could’.

Elections also mean policy announcements. National’s come out of the gate early with part of its welfare policy: something called ‘social investment’. Depending on who you ask, it’s incredibly sinister, or just a bunch of words, or maybe a mystery. I think it’s kind of interesting, and worth a kōrero. Read on for the policy cheat sheet you never thought you needed.

Some people have tough lives. It’s shitty for them, and expensive for everyone.

Let’s start at the beginning, with a few basic ideas about social policy. Social policy drives how government services run, like health, housing, education, the benefit system, and Oranga Tamariki. I’ve argued before that social policy comes in two main types.

Here’s the first type.

Some policy develops people and builds them up - like education and some kinds of health services. These systems are delivered in bulk, because pretty much everyone uses them. If you’re relatively privileged like me, this ‘developing’ type of policy serves you well - you’ve got an education, you’re healthy enough, and you have a job and a house.

Think of it like going through the drive thru, and knowing everything you need is already on the menu. If you’re like me, you get your order reasonably quick and easy.

Now for the second type of social policy.

This social policy is about ‘fixing’ people who are going through challenges - maybe because they’re seen to have failed in some way. Think benefits for people who can’t find work, or Oranga Tamariki interventions for families whose kids aren’t safe. These services are different to the ‘mainstream’ ones. Fewer people need them, and those people might have more complex needs than folks like me.

If you’re a person that social policy is trying to ‘fix’, those interactions can be hard. Think of it like you’re in the drive thru, but the thing you need isn’t on the menu, the kids are fighting in the back, you’ve got a splitting headache and you just realised you left your wallet at home. The drive thru could feel like it’s not designed for someone like you. You might settle for an order you don’t really want - and you might feel stressed out by the process.

National’s social investment policy starts from a few observations most people would agree on.

• Current social policies don’t serve some people very well, typically people who are poor or facing challenging stuff.
• When those policies don’t work, they create future problems - and those problems cost money. For example, if a kid doesn’t learn well at school, they might struggle to find work and need a benefit later.
• Policies relate to each other in tricky ways. Why does that kid miss school? He gets sick a lot. And why is that? Well, his house is unhealthy. And why is that? His mum can’t earn enough to heat the place. To help that kid’s learning, you wouldn’t put more money into his schooling. Instead, you’d take that funding and spend it on his health, housing, and family income.

This is a long way of saying something pretty straightforward: prevention and early intervention are good ideas. If we took the money for fixing problems and stopped those problems in the first place, wouldn’t we all be better off?

This is blindingly obvious. Why don’t we do it already?

It’s a fair question. Let’s return to the drive thru to see if we can answer it.

The drive thru is really good at what it does: quick and easy service for the folks who can find what they need on the menu. For the people who say, ‘Can I have your order please?’, having a bulk delivery system makes things easier to run, and cheaper too. For example, that’s why children usually learn in classes, instead of each kid having their own tailored education programme.

Because the drive thru works for most customers, and for the restaurant itself, there may be little impetus for change. Your average punter gets what they need: maybe they don’t realise what it’s like for the people not well-served by the menu. And the drive thru workers are used to a particular system. Even if they want to, it’s hard for them to step outside the ‘mainstream’ processes around them, making a unique burger for everyone who wants it.

Of course, government services are trickier than a drive thru. There are other factors at play.

• We can be pretty judgy towards people who need things off the menu. Why aren’t they making sure their kids attend school? Why don’t they heat their house to stop the kids getting sick? Why don’t they just get a job - or a second job?
• That judgy-ness makes it hard for politicians to invest in prevention and early intervention. Take a risk on something new, and they might get hammered. The soundbite never goes, ‘Whānau doing their best in a complex set of circumstances gets extra funding to help child stay well and get to school, thereby avoiding future expenditure on benefits’. It’s more likely to be ‘Gang family gets handout’. I can almost hear Mike Hosking’s angry nose breathing.
• We don’t always have good evidence on what services work - especially for people who are poor or facing challenging stuff. And because we don’t always measure if services work, we can’t say if people are getting what they need, or how to improve things for them.
• This bit is more technical. The way government finances work, money gets divided into different pots - one for education, one for health, and so on. Then the pots flow into distinct systems like education or health, that don’t always work well together. Remember the kid who misses school because he keeps getting sick? We figured out that to help him at school, we actually need to focus on his health, housing, and family income. The different-pots-of-money and separate-systems approach isn’t good at making that happen.

Okey dokey - we’ve looked at some of the problems with our ‘traditional’ social policy approach. What would change with social investment?

New pot of money, new set of rules.

As simply as we can, let’s rip through the main features of the social investment approach - and how they’re intended to address the problems we’ve seen.

For starters, a social investment approach would get its own pot of money (a Social Investment Fund). This would make it easier for the kid who gets sick and misses school. Instead of knocking on a bunch of different doors - education, health, housing - he should get what he needs more easily, whether or not it’s on the menu. And it would be paid for from the one pot of money. Less faff.

How would the pot of money get doled out? We talked about prevention and early intervention saving money down the line - cash spent today could prevent bigger bills tomorrow. Things that save the most future money would have first dibs on the pot.

But to judge whether prevention or early invention will save money down the line, we need to know how effective it is. Under a social investment approach, more rigorous evidence would be gathered. We’d be able to see what things work, who they work for, and how much they cost. That would also mean more transparency around public spending.

What are the contentious bits of social investment?

Righto: now we get a little bit technical again. Let’s start with this ‘return on investment’ business.

We’ve seen that under a social investment approach, a dedicated pot of money (Social Investment Fund) would be spent on things that evidence shows will save the most money. For example, a government programme called Healthy Homes, which helps people with things like curtains and heaters, was recently evaluated. The evaluation found the programme has already made a return on investment - saved more money than it cost - thanks to kids’ improved school attendance, fewer emergency room visits, and parents not needing benefits as much. These positives will compound over time, saving more and more money.

But is money saved the best or only way to judge whether a programme like Healthy Homes should be funded? There’s a philosophical debate here. For some people, talking about people’s wellbeing in dollar terms is legit yuck. Aotearoa’s social policy has colonial origins. Making economics the most important thing, without other kinds of knowledge and values, could perpetuate this problem.

On the other hand, expressing things in dollars can keep the conversation neutral. Like we discussed, a soundbite like ‘Gang family gets handout’ deliberately inflames emotions. But investing in something like Healthy Homes to save future taxpayer dollars? Put it like that, and it just seems sensible - even Mike Hosking would struggle to angry-nose-breathe against it. Using investment talk might give political leaders the green light to try bolder things.

Over time, National would seek private investors for a Social Investment Fund. This, too, has raised some eyebrows. You can see why the idea is attractive to politicians: all governments get a hard time for their spending. With others to help foot the bill, government spending would be kept down.

Of course, private investors would expect a return - they only front up with money if they’re confident they’ll get more money back. Why might this be an issue? Well, part of the rationale for social investment is that it saves taxpayers money in the long run. If private investors take part of that future pay-off, there’s less return for you and me, Average Joe and Joanne. We might pay less upfront, but we’ll also get less benefit.

There are bigger social policy questions here - and they’re not just about social investment.

Once again, let’s go back to the drive thru.

We’ve seen that the drive thru is set up to do a certain thing - quick and easy bulk delivery for people who can find what they need on the menu. But some people need stuff that’s not on the menu. The drive thru doesn’t serve them so well: it was never set up that way. It would be tempting to think if we just make these folks a few rinky-dink burgers - a tailored social programme here or there - the problem’s solved.

I like most of the ideas behind social investment. It focuses on prevention and early intervention, and gathering evidence to make sure people get support that really works. But I think we need to be clear-eyed about what it can do, and where its limits might lie.

For a start, we can’t let the drive thru off the hook. It should work better for everyone. The education system should meet everybody’s needs. So should the health system. That should help reduce the people who become poor or face challenging stuff in the first place, and who then need tailored social programmes.

And if our goal is to better support people who are poor or facing challenging stuff, we still need to look at underlying structures, not just social programmes. Put another way, what’s on the menu? Does it offer adequate benefit and wage levels? Does it ensure decent quality and affordable housing? Are only snacks available, or can we get a proper meal?

Social investment will hit its stride when it looks at individual people’s lives and the systems and structures they live within. These are things every government should care about.

OK. I’ve been umming and ahing here for a little while, idling with the window down, figuring out what I want: thanks for your patience. I think I’m ready to place my order.

That’ll be one fundamental shake up of Aotearoa social policy, please. And yes, I’ll have fries with that.

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