New Zealand Returns to Data-Driven Social Welfare Interventions

Matthew Brockett
·2 min read

(Bloomberg) -- New Zealand’s government is returning to an explicitly data-driven approach to social welfare that it says will reduce dependence on state services and save taxpayers money.

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The so-called social investment approach will be given fresh impetus from July 1 this year with the establishment of a Social Investment Agency, Finance Minister Nicola Willis said Thursday in Wellington. The idea is to use data to identify the people most likely to become big cost burdens on the state and intervene early with assistance to prevent it from happening.

For example, by investing in children from households where a parent has been to jail and there is long-term welfare dependency, the government may prevent repeat outcomes and the associated costs.

It’s about “breaking cycles of disadvantage earlier in people’s lives,” Willis said. “We want to look beyond good intentions in our policy-making and use hard evidence to invest in what works. Our new approach builds on better social science evidence and advances in technology.”

The center-right government, which took office late last year, is picking up a policy first championed by former finance minister Bill English a decade ago. It was softened and rebranded by Jacinda Ardern’s Labour-led government when it came to power in 2017.

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Critics of the approach point to privacy issues because it likely requires the sharing of information collected across different government agencies.

There is also concern about whether the government genuinely wants to help vulnerable people or is just seeking to reduce the amount of money they will potentially cost the state in the future.

“If they are going back to the model of looking at people as numbers and families as a fiscal liability, then that’s a step backwards,” said Ginny Andersen, a spokesperson for the main opposition Labour Party.

Willis said the government currently invests more than NZ$70 billion ($42 billion) a year in social services, but “we are not seeing the outcomes we want for all New Zealanders.”

From 2025, a Social Investment Fund, managed by the Social Investment Agency, will commission and invest in better outcomes for vulnerable New Zealanders, she said.

“If we could prevent a child offending so badly that they need to be going to a military academy, if we could wind back their lives 15 years and make an intervention that would actually see them developing their potential better, see them going on a better pathway in life, we would make that intervention every day of the week,” Willis said.

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