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The state of the state New Zealand 2016: Social investment for our future

Written by The NZIER Team | May 9, 2016

A joint report by Deloitte and NZIER.

The investment approach needs to become a mainstream way of working across more of the social sector, according to a report released by Deloitte and NZIER today.

State of the State New Zealand 2016: Social investment for our future advocates broadening the use of the social investment approach to manage New Zealand’s future fiscal challenges and support better outcomes for Kiwis.

NZIER Deputy Chief Executive John Ballingall says the State of the State takes a close look at government finances and the burdens New Zealanders could face in the future.  

“A combination of our ageing population, low productivity and revenue growth, and the need to reduce government debt will impose huge fiscal pressures in coming decades – particularly in social spending.  More importantly, too many people in New Zealand are experiencing poor life outcomes and too many of their children are at risk of following them,” says Mr Ballingall.

Deloitte partner and public sector leader Dave Farrelly says it’s the sum of these factors which drove us to focus the report on social investment, an approach to funding social services focussing on root causes to prevent the need for these services in the future.

“For example, with social investment the task is not to deliver the next 100 prison beds for the same cost as the previous 50.  It’s to remove the need for those new prison beds altogether,” says Mr Farrelly.

“Today social investment is like a start-up – a small number of people are working incredibly hard to bring a big bold vision to life.  Tomorrow, social investment needs to become a mainstream way of working,” he says.

In the six months of research for the report, Deloitte and NZIER spoke to some of the most senior and influential leaders in the public, non-government and private sectors – all of whom provided a unique perspective on social investment.

State of the State proposes a package of bold reforms to realise the aspiration for social investment in New Zealand.  The recommendations are:

1.    Release, every four years, a government-wide statement to define the outcomes and targets for at-risk New Zealanders
2.    Establish a new agency to commission specialist social services for people at risk of poor life outcomes
3.    Embed the social investment approach to funding quality and sustainability in the new agency’s operating model
4.    Enable better access to government-held data and detailed evaluation reports     

“We suggest a structural reconfiguration that some will find challenging, while acknowledging we don’t yet have all the answers,” says Mr Farrelly.

“But we must be bold in tackling these challenges today to maintain our way of life in the future,” he concludes.

The full report can be viewed or downloaded at www.deloitte.com/nz/stateofthestate.