Social investment a dilemma for Labour
It is an approach National is using as part of its political branding
very week on a Wednesday afternoon, the free- for- all debate allows any party to raise any matter of its choosing from the hundreds of issues confronting politicians and the public.
This week Labour deputy leader Jacinda Ardern kicked off the debate and used her five minutes to address an issue that has presented a dilemma for Labour: social investment.
The dilemma has been what to say about it. Until now Labour has said very little.
When it was just a name attached to a concentrated effort to reduce the number of teenage mothers on a social welfare benefit there was not much to be said.
But it is much more than that now. It is an approach about early intervention based on abundant data that is at the core of Government decision- making about social spending.
It is also an approach that National has commandeered as its own and is increasingly using as part of its political branding in this election year.
That makes it hard for Labour to embrace and yet the notion that Labour should oppose concerted efforts to intervene early to improve people’s lives is also electorally unacceptable.
If it says nothing, the field is wide open for National.
If Labour says that this approach has always been Labour philosophy, it is endorsing National’s approach.
If it attacks National by saying it is only about saving money, it will be seen as opposing for opposing’s sake.
Ardern went for the former, saying the notion that we should stop looking at the “mischief ” and start looking at the cause was an old one.
“It is an idea that pre- dates social investment and it is one that is simply common sense.”
She is right that early intervention has been an integral part of Labour’s approach. To use the lingo, Labour “invested” heavily in early childhood education when it was last in Government.
What differentiates social investment from early intervention is its greater reliance on data to calculate future liabilities to the taxpayer in actuarial terms, to identify people through risk predictors who might be a problem, apply a fix if it has been shown to work, and measure the result.
It is targeting to the nth degree and yet the one debate that has barely surfaced from the social investment approach is about targeting.
The whole approach is premised on the assumption that targeting is positive and that even more precise targeting is even more positive.
Targeting versus universality was a major issue during the reforms of the late 80s and early 90s when greater targeting was introduced by Labour and National, including the abolition of the universal child benefit in 1991. Only New Zealand Superannuation survived in the broad welfare system.
The targeting debate appears to be over. The main argument now, in the context of social investment, appears to be how far is too far.
The concerns primarily centre around data and whether extreme targeting stigmatises those who become the subject of intervention.
At the other end of the scale, there are concerns about who falls through the crack when risk predictors are used to identify targets for state- funded intervention.
Former Labour Finance Minister Michael Cullen is showing some scepticism about aspects of the approach, including its name, saying the use of the term “investment” does not differ in substance from the term “spending”.
In a presentation to the Fabian Society this week, he also warns about “the frailty of the data” when it comes to working out the long term liabilities using risk predictors in which small changes in assumptions can add or subtract hundreds of millions of dollars from the numbers.
He is not entirely negative however.
He acknowledged it had helped to move ministers and officials out of their silos and to take a more helicopter view of the priorities.
The timing of Ardern’s speech on Wednesday was in response to Bill English’s pre- Budget speech the same day, which explained further entrenchment of social investment into the government apparatus, and earmarked a $ 321 million package in this month’s Budget.
It is now a firm part of the Budget bid process by the public service.
Agencies now have to answer three questions when they are trying to get more money out of the Government: who exactly are they trying to help; who will be best placed to help these people change their lives; and how will they know we are making a difference.
It sounds so basic it is shocking to suppose this has not been happening all along.
And it probably has in many areas. This imposes a tighter discipline and focus on the public service to justify spending increases — sorry, greater investment.
Social investment Bill English- style has happened with pace only since the last election in 2014.
Before then, even English was among those who described social investment as being money spent on buildings in the social sectors — schools, housing, and hospitals.
Now it is being applied to almost any spending in the social sector.
This week Jonathan Coleman’s preBudget speech was titled the “social investment approach to mental health”, on the basis that early intervention is important and he is promising more funding for it.
English’s language to describe his project has changed during its evolution from an actuarial device to justify getting people off benefits to an intrinsic part of National’s re- election strategy.
He is now describing it more idealistically about changing people’s lives and almost in terms of egalitarianism. In his speech this week he said a great country is one where children with a tough start will be supported so they can live good lives.
Although there is a level of discomfort in Labour about some of the finer aspects of social investment and some very detailed critiques being considered in academia and among the left, it won’t become an election issue.
As Ardern herself said, it is basically common sense. Most people just want to know the job is being done without having to worry about the how.
As Ardern herself said, it is basically common sense. Most people just want to know the job is being done.