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How Social Investment Works

Page updated 30 Oct 2017

The social investment approach involves answering two key questions:

  • Who do we need to get better long-term results for?
  • What is the best way to get those results?

Social investment is part of a wider investment approach.

Who do we need to get better results for?

To identify who we need to get better long-term results for, we need to get better at collecting and analysing data.

If we understand more about people's experiences we will be able to design better services for them. For examples, see Case Studies.

A number of initiatives are underway to more systematically collect and analyse data, to better identify the outcomes experienced by specific groups such as: enjoying economic opportunity; engaging and achieving in education; maintaining good health; and enjoying safety and security. See The Role of Data in Social Investment for more information.

What is the best way to get those results?

To get better long-term results for people with needs that aren’t being met, we need to look at where existing services could be improved, and where we need to innovate to get bigger breakthroughs. To help with this, the government is looking at greater involvement from not-for-profit and private sector providers alongside its agencies.

We also need to compare different options on an "apples and apples" basis. International experience shows that return-on-investment tools which evaluate the costs and benefits of different proposals in a consistent way can be a powerful driver in getting better results for people. A new cost-benefit assessment tool has been developed to enable us to make these comparisons. See Cost Benefit Analysis Tool - CBAx for more information.

To make sure services actually deliver in practice, proposals being considered as part of the social investment approach will need to deliver measurable results. Systematic evaluation of services will be a key part of this. All agencies will need to better understand the effectiveness of their services, and we will increasingly draw on expertise from inside the public sector (such as SUPERU) and outside.

Social investment is part of a wider investment approach

Social investment is part of a wider investment approach to achieve higher living standards.  The wider investment approach is about investing in a way that gets better impacts for New Zealanders from services, policies, regulation, spending etc.  Impacts go beyond fiscal impacts for government.  Impacts for people and businesses can be across sectors and agencies and can be short to longer term. 

The Treasury has released an internal document on the Treasury's approach to investment: tsy-investmentapproach-jun16.pdf (979 KB).  This document was prepared to inform internal discussion with the Treasury Board. Note that it is a discussion document (not a decision document or advice to Ministers).

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