Breaking down the 'social investment' approach

Investment is defined as ‘the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value. To invest is to allocate money in the expectation of some benefit in the future’.

So the Government’s ‘Investment Approach’ sounds like an ideal way to address the growing inequalities and increasing hardship experienced by one in four children in Aotearoa.

There is no question that the title the Government has given to their policy and funding arrangement sounds like it will be good for these families and for all of us now, and we would expect it to be even better in the future. Investing in those families would mean they have adequate incomes, they have enough good food, they don’t have to move frequently to try to find an affordable home, their children don’t have to change schools constantly, they can go to the doctor when they are sick, they can take part in the things that other children do.

But instead of allocating more budget to social and education services to increase current levels of provision, instead of actually ‘investing’, the Government is cutting budgets. At the same time it is introducing a further layer of administration that will capture more of the already reduced budgets. Less and less of the available funding is actually getting to the people who need it.

Treasury’s recent budget analysis verifies the reduction in ‘social’ spending. Over time, as a percentage of GDP ('gross domestic product'), spending on education, health, welfare is decreasing, even as the population is increasing.

The speakers at Child Poverty Action Group's  Social Security Summit: Investing in children provided insights into this ‘investment’ charade. The Government is reducing assistance to those who need help, and at the same time is demonising everyone who needs help. For example, children meet the Government’s criteria for ‘vulnerable’ if two or more of four key risk factors are present. The risk factors are: their parent/caregiver has limited formal education, their parent/caregiver has or has had a prison or community service sentence, the child has been financially supported by a welfare benefit for the majority of their life, and the family has had a substantiated CYF notification.

Using these criteria, 121,400 children have two or more of the key risk indicators, and are thus ‘vulnerable’ and entitled to ‘investment’. Because poverty isn’t one of the criteria, the Government can ignore the 295,000 children living below the income-based poverty line.

It is also important to note that Treasury is very clear that there are major limitations to these risk criteria. For example one-third of children with two or more of the key risk indicators do not have poor outcomes, and the majority of children who have a poor outcome either have one of these risk indicators, or none.

The Government is not rolling out a policy of social investment, ‘allocating money in the expectation of some benefit in the future’. The Government is not investing in children so they can lead more productive and fulfilling lives that will contribute to the current and future wellbeing of us all. The Government has just found another way to disguise its reduction in social spending.