The Government will set aside a total of $275 million for the new Social Investment Agency to make targeted interventions in the lives of vulnerable New Zealanders.
Finance and Social Investment Minister Nicola Willis announced the fund in a pre-budget speech on Thursday. The bulk of this money would go into a $190 million Social Investment Fund which will pay non-government organisations to deliver social outcomes.
“It will invest in services that deliver measurable improvements in the lives of those who need our help, guided by data and evidence. It will support both new approaches and strengthen existing services that work,” she said.
“Each investment will have robust evaluation built in from the start, so Government can track the Fund’s impact and invest taxpayer money with confidence”.
Social investment is an approach to Government spending which treats social services as long-term investments rather than short-term costs. It aims to fund early interventions which reduce the need for future spending, thus having a positive financial return in the long run.
It generally rewards providers based on the outcomes of services, rather than paying for the provision of services themselves. In some cases, payments will only be made for successful outcomes, but this model provides funding based mostly on a proven track record and ongoing monitoring.
The fund will be expected to invest in at least 20 initiatives over the next year and deploy the full $190 million across four years. Willis said it would “start small and grow over time as it proves itself”.
Three investments have already been lined up: early education for families with young autistic children, a non-specified Emerge Aotearoa programme, and a Palmerston North-based Māori health initiative.
Willis said the Government was already spending $7 billion each year on social services provided by non-government agencies but the impact of that investment is poorly tracked.
“Communities, NGOS and iwi all tell us they could have much more impact in people’s lives if the Government was smarter about the way it selects, contracts, and monitors the social services we fund,” she said.
Separate from the Social Investment Fund, the $275 million budget announcement also included $20 million for programmes that strengthen parenting and $25 million to help prevent children and vulnerable adults from entering state care.
In response to a question, Willis said the remaining $40 million would be used to build a data system for the agency and otherwise scale up its operations.
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