Skip to main content

The talk of the town: What will Budget 2024 reveal for social investment?

Sign up to receive Budget 2024 updates

Social investment has been the talk of the town since this Government established it as a key organising principle for changing the delivery of social services. This has led to a flurry of announcements, media releases and editorials on the topic. 

While social investment would appear to be the answer to everything, we are hoping this Budget helps bring clarity to what exactly the question is. 

At its heart, social investment is an approach to policy and operations that uses data, evidence and analysis to make strategic decisions about where to allocate resources. It typically involves intervening earlier and more effectively, for our most underserved citizens, to achieve better outcomes. It involves trying new and better approaches – and taking some risks – while putting in place the monitoring and accountability to build the evidence base for what works and what doesn’t. 

In 2016, when the National government first brought the approach in, it was firmly focused on New Zealanders in the greatest need. However, taking a cohort-based approach, social investment can apply at three levels:

  • ‘Top of the triangle’ - for those who are in crisis, or have multiple and highly-complex needs, social investment brings together a coordinated investment, reduces overlaps and duplication, and is more individual and whānau-centred
  • ‘Middle of the triangle’ - for those with complex needs but the ability to be served through the main social and health agencies, social investment encourages a prioritised view of those interventions and supports that make the biggest difference
  • ‘Base of the triangle’ - for those who are currently stable or have simpler needs, social investment encourages investment in social resilience, cohesion, and enabling infrastructure, and keeping a weather eye on looming liabilities such as long-term health and education risks. 

What this Budget will demonstrate is how wide-ranging or ‘systemic’ the social investment approach will be, the degree of budgetary commitment that will follow the approach, and any specific cohorts, issue areas or geographies that are prioritised for the next period. 

We know that the core commitment to social investment will include cross-Ministerial oversight and a Social Investment Agency with a significantly beefed-up mandate – as a commissioner for the ‘top of the triangle’ cohorts, managing a social investment fund, setting practice standards, and reviewing social sector spending to measure outcomes. 

We can also expect to see:

  • Increased funding for whānau-centred, community-led services that are known to be more effective in working with in crisis, at risk, and complex needs. We may see more funding to commissioning groups such as Whānau Ora, and to agencies’ commissioning funds.
  • Greater expectation that agencies will use data, evidence and harmonised definitions of investment priorities when seeking funding for new initiatives. We should see a shift in investment priority to those services that directly benefit at-risk cohorts.
  • Greater expectation that agencies will bring multi-agency and cross-sector business cases and investment propositions forward, demonstrating a population focus rather than a service focus. The key question will be how agencies can be more effective with the money being spent, to deliver citizen outcomes. 

But there’s more that could be on the table. If this Budget is much bolder in signalling a commitment to social investment, we might see a few more exciting things on offer.

  • Moving beyond the top of the triangle: Investment approaches that respond to at-risk populations, and our looming liabilities. We might see more investment in some of the long-term risks, such as health and educational outcomes, and funding tagged for ‘future issues’ such as climate adaptation and just transitions. 
  • Challenging the core: Investment approaches that only deal with new funding or incremental change are unlikely to get at the bulk of where social spend goes which is in the core. Shifts to the main vote appropriations would be more challenging but likely to shift the dial further. 
  • Enabling social investment more effectively: Investment into our data assets and the digital enablers may not sound like direct social investment, but harmonising definitions, putting data in the hands of local providers and commissioners, and measuring results all require the right tools and technology. 
  • Expanding Social Investment Agency capabilities: Alongside a social investment funder role, there is a need for both Treasury and the Social Investment Agency to meaningfully hold the system to account around social investment outcomes, measuring and monitoring results, and creating evidence and feedback loops. 

And finally, we can hope to see some changes down the road that will continue to embed a social investment approach to social services.

  • Changes to how Treasury allocates and assesses investment cases: we might see a return to more structured social investment cases that use tools such as the CBAx to assess more holistic economic costs and benefits to populations.
  • We should look for indications of how the Government learns from feedback and incorporates it back into the system. Similar programmes overseas are increasingly making ‘shifting the status quo’ an outcome of investments. As we learn more, we should be applying these lessons broadly across our social services.
  • There should be clear signals on how we will catalyse investment beyond the public sector. This is critical for securing the necessary funds to support the future we envision.

The concept has its criticisms – from “targeting” being stigmatising, to the fear it is a stalking horse for reduced funding for social services. The policy debates that have played out over the last six months – from school lunches to smoke-free legislation to military-style bootcamps for youth offenders – remind us that there are genuine choices to be made, and both ideological and evidence-based differences to be worked through. 

But for nearly a decade a more fundamental challenge has plagued social investment: clarity on what it actually is and – crucially – whether it will actually work. To answer both of those, this Budget will need a coherent story and a pathway to scaling and systematising. 

Did you find this useful?

Thanks for your feedback

If you would like to help improve Deloitte.com further, please complete a 3-minute survey