Launch Of The Social Investment Fund

Scoop

15-05-2025

Speech – New Zealand Government
Data, evidence and infrastructure form the backbone of the social investment approach. Together, they provide for safe and secure data sharing that enables the Government to understand where it should focus its efforts.
Minister for Social Investment
Kia ora koutou katoa. Nau mai, haere mai, piki mai. Ki te mihi atu ahau, ki ngā mana whenua nei, tenei te mihi i kaikarakia ko Riki Minhinnick, tēnā koutou, tēnā koutou, tēnā koutou katoa.
Thank you to the Southern Initiative for hosting us in Manukau today.
As many of you will know the Southern Initiative champions social and community innovation in south Auckland to drive real change for people in need.
There are many parallels with the work the Social Investment Agency is doing, and I'm delighted to be making today's announcement here.
I would also like to acknowledge the presence of Social Investment Board members Dr Graham Scott, David Woods and Mike Williams.
Last year I told a story about Jack. It was not your classic Hollywood underdog story – maybe something closer to home, gritty and independent and without a cosy fairytale ending.
When we left Jack he was 22-years-old, had been arrested for assault and was heading to prison. His pregnant partner Danni and four-year-old son were living in a damp, overcrowded rental in South Auckland. He'd had frequent and extensive interactions with government services, which had not been successful in providing the intervention or support he needed to break the cycle.
Over successive decades and successive governments it's become increasingly clear that despite billions of dollars being spent major barriers in the system are holding back change.
The sad reality is that despite many good intentions, outcomes haven't improved for many of our most vulnerable – people like Jack and his partner Danni – whose complex needs span multiple government portfolios.
Since we last talked about Jack, the Social Investment Agency has been developing a new social investment approach for better delivery of social services.
The Government currently funds a huge number of non-government organisations to deliver social services to improve the lives of vulnerable New Zealanders. But many of these providers are operating with one arm tied behind their backs because of a traditionally fragmented, short-term approach to contracting.
I've been told of providers juggling over 100 contracts with up to 17 different agencies – many of them renewed annually. That creates uncertainty, pushes up costs, and drives short-term thinking.
Contracts are often highly prescriptive, focused on easily measured inputs and outputs, rather than the outcomes that actually matter to peoples' lives.
Social providers report spending up to a third of their time on auditing and reporting, rather than working with the people they are supposed to be helping.
Those delivering services that span multiple government agencies often find their overall impact goes unrecognised. Each agency sees only the part that relates to its silo, missing the broader value of the work. As a result, effective, integrated community support is undervalued, and the people who need it most, like Jack and Danni, miss out.
The people in this room know that New Zealanders like Jack and Danni require intensive and bespoke services, which are most effective when provided in their communities, not one-size-fits-all programmes driven by the organisational needs of Wellington bureaucracies.
Social investment flips the model. It puts people – like Jack and his whānau – at the centre of social service delivery.
It means being clear about the outcomes we're purchasing, who we're targeting, and the data and evidence we'll use to determine what is and isn't working – and what we should, and shouldn't, be funding.
And it means partnering better with the organisations like many of you here today, who are best placed to help the likes of Jack, Danni and Jack Jr thrive – as long as Government will let you.
SOCIAL INVESTMENT FUND
To drive this change, today I am announcing that Budget 2025 allocates $275 million over the next four years to Vote Social Investment.
The centrepiece of the Social Investment Budget is a new $190 million Social Investment Fund, designed to change lives and tackle the very problems we've talked about – short-term contracts, siloed funding, and a lack of focus on outcomes.
In addition, the Social Investment Agency has been allocated:
$20 million for initiatives that strengthen parenting in the first 2000 days of a child's life, reducing harm and setting children up for better long-term outcomes; and
$25 million for initiatives to help prevent children and vulnerable adults from entering state care, as part of the Crown's response to the Royal Commission of Inquiry into Historical Abuse in State Care.
The hero of today's announcement is the Social Investment Fund.
It will invest in services that deliver measurable improvements in the lives of those who need our help, guided by data and evidence. It will support both new approaches and strengthen existing services that work.
Each investment will have robust evaluation built in from the start, so Government can track the Fund's impact and invest taxpayer money with confidence.
The Fund is expected to invest in at least 20 initiatives over the next year.
Today, I'm pleased to announce the first three initiatives which demonstrate how the Fund will work in practice:
The first is an Autism NZ initiative to each year help 50 families of young children who are autistic or showing signs of autism by intervening early so that families, teachers, and other professionals, are better able to help these young people to thrive at school.
The second extends to another 80 families an evidence-based Emerge Aotearoa programme that has been proven to reduce youth offending and truancy.
The third is He Piringa Whare, an expanded programme delivered by Te Tihi o Ruahine, an alliance of nine hapū, iwi, Māori organisations, partners and providers with a track record of using data and evidence to shape its services.
The He Piringa Whare programme will support over 130 families at a time to live in warm, dry homes, engage them in education, training and employment and support whānau to live in relationships that are free from violence.
All three of these initiatives have established expertise, but all have historically struggled to secure funding for their services because the outcomes span multiple government agencies.
My goal is that the Government's new approach will help us prove the return on these investments so we can scale them up over time.
But what might the work of the Social Investment Fund actually mean for someone like Jack and Danni?
It could mean a coordinated response from Te Tihi: support for Jack as he reintegrates into his community after prison, parenting programmes for him and Danni, smoking interventions while Danni is pregnant; tailored housing support; and education and health services wrapped around their young family.
Not a patchwork of agencies working in silos, and providers cobbling together piecemeal funding and contracts.
It means a dedicated support worker who knows their whānau and a stable home for Jack, Danni, and their children.
It means early identification of autism for Jack Jr, when his Plunket nurse sees early signs of autism and refers him to Autism NZ.
Autism NZ, in turn, could provide Jack's whānau with tools to better understand his needs and get him ready for school, provide access to the learning support his father would likely have benefited from and didn't get, and on-going support for the whole family, setting the foundation for long-term success.
We're not talking about waving a magic wand, applying a quick fix or simply servicing misery. This is about investing in smart, targeted early interventions that not only make a difference in the lives of Jack and his whānau, but mean the Government reduces the money it might otherwise have spent on treating the symptoms rather than the cause of dysfunction – be it at the crisis end of the justice or health systems or government provided income support.
Maybe if Jack had received something like Emerge's services as a youth, things wouldn't have progressed to where he was heading to prison. Its Multi-Systemic Therapy programme has seen at least 80 per cent of the young people it works with engaged in education or work with no new arrests.
The Social Investment Fund is starting small but I see potential for it to achieve significant scale over time.
Government agencies currently spend about $7 billion each year buying social services designed to improved lives from non-government agencies.
In the years ahead we want to see more of this funding and more of these contracts transferred into the Social Investment Fund.
We will work with providers and communities who want to consolidate theirmultiple government contracts into one genuinely outcomes-based contract.
The Government is also open to the pooling of social sector funding from multiple government budgets into a single fund under local decision-making. We often hear local leaders saying that they could do a better job of investing in outcomes than multiple government agencies and we want to hear from you how we can make that work.
We're also creating the opportunity for future co-investment opportunities with the philanthropic and private sector.
The Social Investment Fund is a rejection of the failed approaches of the past. It's being set up as a totally new way of working with you, the people who know Jack and Danni best and who are best placed to impact their lives for the better. I see it as a force for enduring change that will survive changes of Government.
Because Jack doesn't care that the providers that have been in contact with him have been doing it hard. He doesn't know that they scrounge and scrape to get by, managing dozens of contracts with agencies, getting endlessly audited and reporting back on every minor detail.
A central fund with a clear mandate gives us the best chance of working with those outside of government to improve the lives of the most vulnerable New Zealanders.
SOCIAL INVESTMENT ACROSS GOVERNMENT
The Social Investment Agency also has a wider leadership role. It's purpose is to demonstrate and accelerate change that ensures all government agencies invest more effectively to deliver better outcomes for New Zealanders.
It is building tools, infrastructure and methods that both government agencies and the wider social sector can use. That includes better ways to track progress, measure outcomes and understand what's actually working.
This will also improve the way the Government delivers mainstream social services in health, education and other areas.
For example, the Government invests billions of dollars in education every year, but the returns – in terms of literacy, school attendance, and long-term outcomes – are not where they should be.
We know that many kids with additional needs struggle throughout their time at school. We also know that if we intervened earlier to help them they'd be capable of achieving a whole lot more.
This is a prime area for applying a social investment approach – targeting resources earlier, backing what works, and ensuring that spending leads to better outcomes later in life.
If we get it right early, we reduce the need for far more expensive interventions down the track. You can expect to see that thinking heroed in this year's Education Budget. And I'm looking forward to saying more about it next week.
It's not just about education. We want every government agency to be asking: how can we invest smarter? How do we make sure out spending is improving lives, not just funding activity?
That means being open to innovation – and by that I mean being open to, and enabling, new approaches to existing challenges. We need to recognise that the overly risk-averse approach traditionally taken by government agencies has not shifted the dial – especially for families with high and complex needs or intergenerational issues.
We also know that innovation is happening outside of the Wellington system – in spite of the barriers government can put up. We want to back communities and non-government organisations who show insight in their use of data and evidence, who are willing to innovate and to clearly evaluate what's working and what's not working.
It's about constant improvement. We want to see data used to constantly measure the progress being made and to identify how we can do better together.
Data, evidence and infrastructure form the backbone of the social investment approach. Together, they provide for safe and secure data sharing that enables the Government to understand where it should focus its efforts. They also enable providers to understand their impact and what else they need to do.
A key goal for the Social Investment Agency is to reduce the amount of reporting and data being sought by government agencies from providers.
We recognise that the amount of meaningless information presently sought by agencies can be burdensome for NGOs and often adds very little value relative to the work required to provide it.
Social investment contracts will be designed to reduce the amount of data being required while improving our insights about what actually has impact.
SPEND TO SAVE
Social investment not only improves lives, it also frees up resources for investment in other priorities.
When we invest even relatively small amounts in the right places, that can lead to bigger and better impacts – both socially and fiscally.
Our Government is willing to make investments up front to drive durable savings down the line.
We're starting to shift how this logic is reflected in the Budget process — recognising that not all spending is a cost. Some spending is investment that provides a social and financial return over the longer-term. And when it's well-targeted and backed by evidence, it pays for itself many times over.
We've already put this theory into action.
In December 2023, over 3,100 households were living in emergency housing motels – often for months at a time and at one point costing the country around a million dollars a day. Some of these motels became long-term living arrangements for families with young children. It was one of the most visible policy failures in recent memory – unsustainable, expensive, and harmful to the people stuck in the system.
So we changed approach. We made families with children a priority for social housing. We made an upfront investment of $80m and we worked across agencies to support people into stable housing – including private rentals.
The result was that by December 2024, the number of households in emergency housing motels dropped to 591 – a 75% reduction in just 12 months, and five years ahead of the target we set on coming into office.
This is not just a huge social success for the thousands of families now raising their children in proper homes. It's also a huge success for the taxpayer – with savings of nearly $1.35 billion forecast over the next four years. That's hundreds of millions of dollars that would have been spent on motel bills instead being reinvested back into social services, education, and health.
Budget 2025 builds on this approach. It includes further initiatives where smart, early investment is expected to generate real savings, including in areas like employment, where helping someone into work today not only improves that person's life prospects, but lead to savings for the taxpayer.
This is how our Government will build a social system that's more effective, more sustainable, and that replaces heavy-handed bureaucracy with real results.
CONCLUSION
Fast forward ten years. On this trajectory, we expect to see Jack, Danni and their children thriving, living in a home full of hope, not hardship.
Jack and Danni have been able to give their children stability they themselves haven't had. With parenting programmes and community support, they have a confidence and a sense of belonging brought about by interventions that were targeted, holistic, and locally-driven.
We're looking forward to seeing communities drive the change we want to see. We know that real change will come from the leadership of people like those in this room, not policy advisors on the Terrace.
Today's Budget announcement is a big step forward. Over the next few years, I expect to see significant amounts of funding transferred to the Social Investment Fund, which will enable providers to work holistically and flexibly to improve people's lives.
Our Government believes in the potential of every person growing up in this country.
Because every New Zealander deserves the chance to live in a home full of hope, not hardship. That's the vision for social investment and I'm looking forward to working with you to make it happen.