Budget creates new social partnership

Adrian Wimmers

For Web Edition-Budget creates new social- Adrian WimmersBudget 2015 is a step further down the social investment path for this National-led Government, both in scale and ambition.

The Government is attempting to present a compelling logic for its social investment approach; a logic it hopes will continue to inform New Zealand’s direction past the tenures of the Prime Minister John Key and Finance Minister Bill English.

This Budget is not exclusively about which agency the government channels taxpayer money through but about how focusing and addressing key social issues can improve the situation of targeted individuals while delivering financial improvement.

Key Features

This Budget’s key social features include a package designed to ease child hardship; additional government spending to support vulnerable children; further development of its flagship Social Housing Reform Programme; and further investment in health, education and trades training.

Beneficiary parents of the children targeted in this Budget will, however, face increased requirements to return to work, increase part time work and/or have their eligibility re-tested every year.

Surplus Focus

Despite delivering a social budget, this Government is acutely focused on moving towards a surplus. To that end, Mr English has described social investment as “targeted, evidence-based investment to secure better long term results for the most vulnerable New Zealanders.”

The government is willing to pay more up front on the assumption that sustainable change for the most vulnerable New Zealanders will equate to financial gains for the Crown.

That is, although this is a ‘social’ approach, the key aim remains improved fiscal track.

Local Government, Social Housing and State Services Minister Paula Bennett will have a key role to play in achieving the aims of this Budget with Mr English.

Minister challenged

Her portfolio has been designed to give her the visibility and change levers needed to progress the social investment agenda beyond the realm of her previous portfolio, Social Development.

Ms Bennett’s new mix of portfolios and experience make her a key player supporting the social element of Mr English’s broader economic strategy, and signals the increasing part she is expected to play in delivering this Budget and achieving the government’s aims.

We can expect greater focus on the following in 2015-2016: (a) Information sharing between public sector agencies (b) Systemic measurement (c) Evaluation of interventions (d) More effective contracting, increasingly focused on integrated service delivery (e) Existing providers, especially government agencies, facing increasing levels of contestability.

All these signal a new way of working between government and private/not for profit social sector providers.

It is less about how Government is organised or officials’ desire to shy away from ‘risky’ innovation, and more towards making a difference to people in need, as long as the fiscal return is identifiable.

Confounding barriers

However, there are several barriers that must be overcome for the government and the public sector to achieve the desired results.

These include variable quality of information available to inform targeting investment as well as culture and practices across public sector agencies that hinder collaborative initiatives and the ability of NGOs to respond to rapid changes in the way their services are commissioned.

The impacts of these barriers should be closely monitored, and steps put in place to overcome them in the future.

“The budget signals a new way of working between government and the social sector”

Adrian Wimmers is Head of Infrastructure at KPMG New Zealand, Sponsor of the ‘Best Accountant of the Year’ Category of the Indian Newslink Indian Business Awards 2015.

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