The first round of funding for the community sector Social Investment approach closed this week and it charts a clear path - one where ending child poverty loses, writes Child Poverty Action Group executive officer Sarita Divis.

Firstly, why Child Poverty Action Group have taken an interest in this is that social investment is being touted as the approach to tackle child poverty in Aotearoa.

The push began with National’s Finance Minister Nicola Willis for social investment across the $70,000,000,000 worth of social service spending and been picked up Child Poverty Reduction Minister Louise Upston, who has framed social investment as the way forward for child poverty reduction[1], most recently at June’s Child Poverty Summit at Parliament.

It also seems that there may be a bipartisan approach to the continuation of social investment, with both Labour’s Jan Tinetti and the Green’s co-leader Marama Davidson now holding the spokesperson portfolios for both child poverty reduction and social investment. But the specifics of their version of social investment is yet to be determined.  

Blaming families, not the system that fails them

Child Poverty Action Group has voiced its concerns many times over the years with the social investment approach and how its application impacts child poverty in Aotearoa [2].   

Government’s own framing makes clear that many of our concerns are already being realised. At the heart of this model is a story about poverty that points the finger at families, especially parents, rather than at the political decisions that have hollowed out the welfare state. Cuts and neglect (past and present) have driven child poverty to today’s levels, yet the “social investment” lens recasts poverty as a matter of individual failure.

In the Minister of Finance’s first paper on “accelerating social investment”, she writes.

“We can see the lack of appropriate support for our most vulnerable
reflected in rises in welfare dependency, declining school attendance and
achievement, poorer health outcomes, rising rates of youth and violent crime,
rising gang membership, ongoing dependence on statutory services such as
Oranga Tamariki and Police, as well as increasing rates of inequality.” [3]

The social investment approach being put forward by the Minister frames “appropriate support” not as a functioning welfare system or properly resourced health and education services. Instead, the larger social and structural causes of child poverty and chronic underfunding are denied[4] , replaced by blaming (stigmatising, targeting) the individual.

Correlation vs causation, and confusing symptoms with causes

Further into the Minister’s 2024 paper accelerating social investment, she cites analysis from the Social Wellbeing Agency on youth with the greatest number of risk factors linked to crime. Over their lifetimes, this group showed:

·       Over one-third (38%) lived with families where the income per family member (equivalised income) was less than $20,000 p.a.

·       Most (92%) were supported by a main benefit

·       Over half (51%) lived with an adult who had received support for a mental health or an addiction issue

·       Most (83%) lived with an adult who had been convicted and sentenced for a relatively serious criminal offence.

·       By age 5, 64% of young people with very high needs had contact with a public service agency for a serious issue. This pattern repeats throughout their childhood

The Minister then argues this shows it is not a lack of government support contributing to poor outcomes, but that the “approach” to support has been wrong. Because these children had repeated interactions with government agencies, the problem, she claims, must lie elsewhere.

“These young people had come into regular contact with government
agencies for serious issues throughout their childhoods but had
not received the support they needed to change their pathway.”

This reasoning confuses correlation with causation. Poverty and disadvantage are presented as the outcome of welfare itself, rather than as evidence of systemic failure to ensure incomes, services, and opportunities are adequate. Welfare is framed as “dependency”[5] rather than investing in how we can make sure incomes are adequate and above the income floor.[6]

Social investment is to be used to identify individuals and target them with some activities that focus on outcomes for that individual to take them out of this ‘welfare dependency’

The model instead narrows in on identifying and targeting individuals with interventions aimed at changing their personal outcomes. But this misses what would make the most difference: lifting income adequacy so families are not surviving on less than $20,000 a year.

In this light, social investment functions as political window dressing. It allows the Government to appear active, while in practice justifying inaction on measures that would measurably lift children out of poverty.

This is especially troubling at a time when the latest child poverty statistics showing the issue is affecting more whānau, not fewer, and that New Zealand will not meet the legislated Child Poverty Reduction Act target of halving child poverty by 2028.[7]

Round 1 priority cohorts lean into the individual blame narrative

It was therefore unsurprising that the first round of funding selected the following “priority cohorts”, chosen not by the community sector, but by the Minister and the Social Investment Agency:

1.     Children whose parent(s) are currently or have recently been in prison.

2.     Children of parent(s) who experienced the care system.

3.     Children stood down or suspended from school at age 12 or younger.

The Social Investment Agency boasts on its website about “building a fence at the top of the hill.”

Yet this fence is built only for a small group, while more and more children fall into poverty. By selecting these cohorts, the Government reinforces the idea that poverty is the result of individual and parental failings, neatly aligning with the social investment narrative.

Community providers set up to fail

In May, the Government announced $190 million for 20 initiatives.[8] On paper, that’s about $9.5m per initiative. But a closer look reveals shows us the first round seeks to fund six initiatives by offering contracts of just $0.5–$2m per year for four years.[9] 

That works out to only $2,000–$8,000 per person per year supported (based on $500k–$2m contracts for a minimum of 250 participants).

Having worked in the youth sector, and in conversations with community providers working with vulnerable rangatahi, this is woefully inadequate.

For comparison, the Government recently funded Bootcamps at a cost of $100k per teen for the year. If one of the outcomes is to keep children out of the prison system, which costs $120k per person each year in New Zealand, surely we can spare more than $8,000 per year for prevention?

This is especially worrying as the cohorts chosen are vulnerable rangatahi that deserve extensive wrap around support. 

Just to also note the offering is for 4 year contracts this is not a change to a long-term outcomes based approach. In fact many of the Ministries already have a majority of contracts in this range or higher.[10] If we are switching to a longer term outcome approach then 10 year contracts would be the standard.  

Are they setting the community providers up to fail? Are they building trust with the sector or just expecting them to accept crumbs for hard work and then the responsibility for failure?

How will they be measured? The measurement and control by Government

The Social Investment approach claims to be about using data and evidence to support decision-making across the system.  

CPAG have already raised concerns about access to data in the recent cuts to the census[11] to the growing reliance on the IDI without clear plans for democratisation or data protection and retaining social licence[12].  

Community providers not only had no input into selecting the cohorts, they were also handed a “data explorer” built on hand-picked variables from the Social Investment Agency, rather than datasets shaped with the sector itself.

There are glimmers of progress elsewhere. Nicolson Consulting has worked with Stats NZ to develop IDI code modules that translate raw data into meaningful, reliable datasets for researchers.[13] CPAG has also been gifted a data navigator tool by the Te Rourou Foundation, underpinned by Māori data sovereignty principles, which will help put some datasets directly into the hands of communities.

But right now, providers are being asked to deliver projects without having any real say in how they will be measured or evaluated. For example, if a provider commits to “improved health outcomes,” it matters greatly whether they are measured against “days in hospital” or “treatment for self-harm.” Without that clarity, the terms of success are effectively outside their control.

Example Social Investment Agency outcome for Round 1 funding

Improved health

·       Reduced serious health events

·       Reduced potentially avoidable hospitalisations

Example IDI data points that could be used for measurement but not provided to community providers in preparation for their EOI    

·       hospital_days               - Number of days in hospital

·       PAH                              - Was a young person hospitalised with a preventable condition?

·       self_harm-                    - Was a young person treated for a self-harm/suicide event

·       not_immunised             - Whether the young person has had an immunisation event

·       acc_claims-                   - Indicator for ACC claims made by the young person

·       never_hospitalised        - Whether the young person has been hospitalised 

As part of their applications community providers are expected to agree to the Social Outcomes Agreement, yet another demonstration of where the power lies in this relationship.

From the Social Outcomes Agreement template:

The Delivery Partner acknowledges that:

(a) high quality social investment depends on effective evaluation of initiatives – to understand what works, how well and for who; and

(b) the objective of evaluation is for each party to obtain evidenced-based learnings and insights.

16.2 The parties agree that: (a) the Funding Partner will approve the impact analysis design and the method of evaluation for the Initiative;

(b) they will work together on how to capture, measure and report relevant data and embed evaluability into the design of the Initiative[14].

Has Social Investment been welcomed by the community and wider sector?  

We need to ask why the community and public sectors are accepting the Government’s social investment approach.

One factor is timing. Social investment has been rolled out alongside deep cuts to the public service. The Finance Minister promoted the newly branded Social Investment Agency as the central body to monitor funding, service delivery, and accountability across the sector, just as morale in the public service was collapsing. With jobs on the line, few had the energy to mount a challenge.

The community sector has also borne the brunt of sudden cuts, sometimes with only days’ notice, such as the Oranga Tamariki contract cancellations[15]. In this environment, many providers applying for social investment funding know the contracts are woefully inadequate, but are simply desperate for resources to sustain their mahi and secure some degree of certainty.

The feedback we are hearing is that, while flawed, if social investment is the only game in town (and with bipartisan support it increasingly appears to be), providers feel they have little choice but to play along.

What Social Investment should really look like

If used properly, social investment could provide a powerful foundation for services and programmes that benefit all children, not just a targeted few. A genuine approach would ensure every child has the opportunities, resources, and support to live a full, healthy life, develop their skills and talents, and grow into a contributing adult.

That kind of investment must start with the basics:

·       All children live in households with sufficient income to thrive.

·       All children have access to adequate and affordable food.

·       All children can access affordable, quality health care.

·       All children have warm, safe, and affordable housing.

·       All children with disabilities receive the supports they need to live alongside their peers.

·       All children attend schools where educational opportunities are not limited by family income or community wealth.

·       All children can access culturally-appropriate, well-funded support services when required.

·       All children can participate in cultural and sporting activities with their peers.

There are already examples of what this could look like. The Salvation Army, in its latest food insecurity report, called for a social investment approach to expand free school lunches.[16]  Other organisations are exploring similar approaches in relation to preventative health.

There is also a role for data, but used differently: the IDI could provide evidence to drive systemic change, for example, identifying gaps in affordable rental housing[17] or estimating the additional income required for children in households with disabled members to escape deprivation.[18]

Once the universal fundamentals are in place, the community sector has a vital role to play. A genuinely community-led approach would mean:

·       community input into priority setting through needs analysis,

·       democratising IDI while safeguarding data protection and social licence,

·       co-designing shared measurement frameworks and indicators, and

·       funding providers for success rather than failure.

Social investment that focuses on structural causes, and uses data and evidence to strengthen rather than stigmatise, can help create a better Aotearoa New Zealand for all. But it must begin with a clear starting point: investment means resourcing the wellbeing of children and families, extensively, comprehensively, and universally. Only then can we achieve the ultimate goal: ending child poverty.

References:

[1] https://www.beehive.govt.nz/release/making-difference-young-new-zealanders and https://www.publicservice.govt.nz/assets/DirectoryFile/Accelerating-Social-Investment.pdf

[2] [1] https://www.cpag.org.nz/media-releases/the-social-investment-issue

[3] https://www.publicservice.govt.nz/assets/DirectoryFile/Accelerating-Social-Investment.pdf emphasis added.

[4] CPAG annual analysis of Government Budgets has documented the chronic underfunding of social services that has been going on for decades  https://www.cpag.org.nz/publications

[5] https://www.publicservice.govt.nz/assets/DirectoryFile/Accelerating-Social-Investment.pdf and for further reading on how reducing the number of children in households receiving the benefit rather than  income adequacy is driving decision making on child poverty see https://www.msd.govt.nz/documents/about-msd-and-our-work/publications-resources/information-releases/child-poverty-reduction-targets-papers/1-may-2024-draft-cabinet-paper.pdf

[6] https://www.cpag.org.nz/publications/below-the-income-floor-modelling-income-adequacy-for-low-income-households-in-new-zealand-2018-2026

[7] https://www.cpag.org.nz/statistics/20232024-child-poverty-statistics-released-20-feb-2025-awtwl-2z9nh

As of June 2024, it is very probable that 9,000 more children are in material hardship compared to 2018 when we, as a nation, agreed to tackle child poverty. In 2018, 148,069, or 13.3%, children were in material hardship; by June 2024, there were 157,048 children or 13.4%.

[8] https://www.beehive.govt.nz/release/social-investment-fund-help-vulnerable-kiwis

[9] https://www.sia.govt.nz/social-investment-fund/social-investment-fund-faqs

[10] Examples from Ministry contracts are that  Oranga Tamariki, 68 percent of contracts are 4 years in length • For Ministry of Justice 55 percent of contracts are 5 years in length • For Te Puni Kōkiri, 27 percent of their contracts are 10 years or longer. https://www.msd.govt.nz/documents/about-msd-and-our-work/publications-resources/planning-strategy/social-sector-commissioning/social-sector-commissioning-update-2022.pdf

[11] https://www.cpag.org.nz/commentary/if-we-dont-count-we-cant-help-how-ending-the-census-obscures-poverty  and https://www.cpag.org.nz/commentary/cost-pressure-and-saving-money-does-not-bode-well-for-idi-and-annual-survey-replacing-the-census

[12] https://www.cpag.org.nz/commentary/social-investment-is-not-the-solution-to-ending-child-poverty-in-aotearoa

[13] https://www.nicholsonconsulting.co.nz/stories/code-modules-maximising-the-impact-of-idi-data-in-aotearoa

[14] https://www.sia.govt.nz/assets/Documents/SIA-Social-Outcomes-Agreement-TEMPLATE-August-2025.pdf emphasis added

[15] https://www.1news.co.nz/2024/10/15/inquiry-launched-over-oranga-tamariki-provider-funding-cuts/

[16] https://www.salvationarmy.org.nz/wp-content/uploads/2025/09/TSA-Ending-food-insecurity-report-Sept-2025.pdf

[17] https://www.cpag.org.nz/publications/rental-research-affordability

[18] https://ojs.victoria.ac.nz/pq/article/view/9760