Social Investment Is A Problem Not A Solution – Child Poverty Action Group

Social investment has been developed and promoted as ‘the solution’ to a range of social issues and problems. In brief, it is based on targeting individuals/families who have been identified through the use of administrative data as facing problems such as poor school attendance, unemployment, criminal behaviour, homelessness, needing welfare assistance etcetera.

It uses information collected by various government departments and agencies to identify those individuals/families and then targets assistance to those identified as being ‘at risk’. The supporters of social investment argue that this ensures that only those who need assistance receive it and government is able to make best use of its resources.

It seems like a common-sense response, but, therein lie the problems and dangers with social investment. Common sense is often not very sensible in responding appropriately to complex social situations. What seems like common sense is anything but common sense, for three major reasons.

First, it assumes that the data will identify all the individuals and families who need assistance and it will identify only those people. However, Treasury analysis of the New Zealand data in 2016 showed that there was a very poor link between those identified on the basis of the administrative data as being ‘at risk’ and those who experienced poor personal and social outcomes. Many who did not need assistance were identified as if they did need assistance while others who needed assistance missed out.

Statistical data can provide a useful starting point. However, people are not just statistics. They live their lives in family and community relationships which statistics can’t always capture and our health, social and education programmes are only successful if they work with all of these factors.

Second, targeting individuals as promoted by this individualised approach to social investment creates significant stigma for these individuals and families. We have plenty of good evidence of the harmful effects that this creates, especially among those who are singled out.

Evidence from around the world shows very clearly that stigmatising (targeting) people in the way that social investment does results in people not seeking help or not getting the support and assistance they need. International experience and evidence demonstrates that a targeted social investment approach singles out minority ethnic groups. In the New Zealand context this would mean Māori, Pacific peoples, refugee and migrant communities.

A number of states in the USA which introduced some form of social investment have now abandoned the experiment either for ethical reasons or because of the stereotyping of recipients or because it is a very inaccurate and imprecise tool for providing a range of social services. Given what we know of American approaches to social service provision, if they are turning their backs on it, then we should make sure that we avoid the social investment road.

Third, social investment assumes that ‘the problem’ is the result of the actions of the individual and/or her/his family. The larger social and structural causes of social problems are denied by blaming (stigmatising, targeting) the individual. The disadvantaged are blamed for their own disadvantages.

Social investment that focuses on social rather than individual causes has an important contribution to make in ensuring a better Aotearoa New Zealand for all. We need to invest more extensively and comprehensively in the wellbeing of all New Zealanders, particularly children and families. Targeting that investment at specific individuals won’t do that. It will make Aotearoa New Zealand worse not better. That seems like a foolish and dangerous path for social and public policy. It is neither a panacea nor a sensible and responsible social policy.

Professor Mike O’Brien is a Social Security Spokesperson for Child Poverty Action Group.