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PM Speech: Social Policy Research Conference

Rt Hon Helen Clark Prime Minister

Opening Address to Social Policy Research and Evaluation Conference

Wellington Convention Centre Wellington


Thank you for inviting me to open New Zealand’s second Social Policy Research and Evaluation Conference.

Last year’s conference, the first, made its mark as an important contributor to work to improve the social policy evidence base. It built a broad consensus for the use of evidence in social policy. This year, this second conference focuses on the need to use evidence about what works to improve social outcomes.

Thanks must go to the Ministry of Social Development, and to their research colleagues outside government, who have served on the steering committee for bringing together this week’s comprehensive and varied programme of keynote addresses and concurrent sessions. We are privileged to have speakers of high calibre and international standing here to share their expertise and knowledge.

I extend a very warm welcome to all speakers, and particularly to our visitors from overseas. Each one will raise pertinent and challenging questions about using the ‘what works’ approach to target social investment and foster good social outcomes.

Making evidence the basis on which we target our social investments is a crucial part of our government’s commitment to putting social policy firmly back on the national agenda.

Putting social policy back on the agenda

When this Government took office in 1999, we inherited the poor results of a market-driven, deregulated, highly ideological approach to social policy and development. The policies which had been followed were particularly destructive for low income households, and left society overall damaged, fractured, and far less cohesive.

New Zealand had gone from being one of the world’s first welfare states to being the first western state to seriously undermine its social safety net. That began with the infamous 1991 “mother of all budgets”, which cut social security benefits and introduced market rents for public housing. Over time the cost to households of essential services like health and education also moved up. Queues mounted at food banks, and the Household Labour Force Survey showed unemployment moving into double figures.

While the economy began to grow again through the early and mid 1990s, that growth wasn’t job rich. The policy settings used looked unlikely to deliver unemployment levels below six per cent.

Other indicators of social wellbeing also deteriorated – from the state of children’s dental health, to a surge in infectious diseases, to a rising crime rate peaking in 1996.

These trends could not be changed over night, and a magic wand was not at hand. But the first steps in a new direction emphasising social inclusion, fairness, opportunity, and security were taken.

We acknowledged the problems; we didn't run away from them; we did not pretend they were not there. We began to move New Zealand away from where neoliberalism had taken it. That meant developing a new direction for the nation and a new role for government in the 21st century, and reclaiming New Zealand’s old egalitarian streak for the new millennium.

One of the most frustrating aspects of neoliberalism is its duplicity. Its advocates always claim to want to advance equity and fairness, when the evidence shows that their policies do the opposite. One wonders why they persist with the facade, and must conclude that the only explanation can be that no one could be elected to government in New Zealand on a platform of wanting to increase unfairness and inequity !

An important first step for our government was to restore the capacity of the public service to give the government practical rather than theoretical advice. We wanted to move beyond the high flown statements of objectives which flow so easily from the pen, to the nitty-gritty of how to make things happen. There were many pressing problems demanding practical solutions.

We embarked on this journey with the clear knowledge that social and economic development are inextricably linked, and that the health of our society plays a crucial role in determining the health of our economy. We knew that to build and develop a modern social democratic state, we needed to balance social and economic policy by investing from our surpluses in infrastructure, social provision, economic development, and labour market initiatives.

Much has happened. Since the end of 1999, the government has been actively involved in developing social policies which emphasise fairness and social inclusion. Examples include:

raising the rate of New Zealand’s universal superannuation to a level deemed necessary for older New Zealanders to be able to participate in society; introducing income-related rents for state housing and increasing the public housing stock; an employment ‘job rich’ policy to move people off benefits and into work; a major restructuring of and reinvestment in primary health care to bring affordable doctors’ visits to low and middle income New Zealanders; significant initiatives in public health, including a $200 million campaign to immunise New Zealand's children and young people against meningococcal meningitis; fairer labour laws promoting collective bargaining; paid parental leave from work at the time of the birth of a child; significant increases in the minimum wage; major investments in skills training, apprenticeships, and lowering the real cost of tertiary education; major investments also in early childhood education, which will include by 2007 the introduction of 20 hours free attendance a week at community-based services for all three and four-year-olds; the Working for Families package announced in May 2004, which boosts incomes of low and modest income families with children; and a fourth week’s minimum annual holiday beginning in 2007.

These programmes and initiatives have been developed on the basis of solid evidence of what is needed to get results which will meet our objectives. The decision to substantially lift the incomes of those in low wage employment in the Working for Families package, for example, was made following study of international research which demonstrates the benefits of generous income enhancements for low income workers. Such workers often slip in and out of unemployment, and income enhancements are understood to be the most effective way of creating pathways into permanent employment and out of poverty.

Let me explain a little more about the Working for Families package, particularly for our international visitors who might not be familiar with it.

Over the next two and a half years, substantial targeted tax relief is coming for 300,000 New Zealand households with dependent children. That’s sixty per cent of all households with dependent children. Two thirds of these families are in full time or part time work now – and those in work are guaranteed to be better off than they would be on benefits.

By 1 April 2007, families earning $25,000 to $45,000 a year will be, on average, $95 to $100 a week better off through these changes – and that’s not counting any help from the improved accommodation and childcare subsidies which are also part of the Working for Families package.

These changes will have a dramatic impact on child poverty, reducing it by up to seventy per cent if we use fifty per cent of the median income as the poverty line.

But even if we use sixty per cent of the median as the poverty line, we reduce child poverty by thirty per cent – and at this new level, child poverty in New Zealand reduces well below the average European Union rate – and will be on a par with that of the Netherlands.

I am proud to say that the Working for Families package is the biggest single redistribution of income to low and middle income families in three decades. It stands in stark contrast to the redistributions upwards during the last two decades which increased social inequality.

The change of approach to social and economic development over the last five years is already showing results.

We have achieved annual economic growth at an average 3.7 per cent per annum since coming into office, with growth for the June year 2004 coming in at 4.4 per cent.

This growth has been job-rich. The number of people in work has risen considerably in the last four years – a combined rise of 193,000 or 10.8 per cent between the March 2000 and March 2004 quarters, and well over 200,000 over the five years we’ve been in office. Meanwhile, the unemployment rate has fallen from 6.8 per cent in the September quarter 1999, to 3.8 per cent in September quarter 2004, an 18½ year low and the second lowest rate in the OECD. Korea at 3.7 per cent has only a marginally lower rate.

The number of long-term unemployed (those out of work for more than six months) continues to fall, from 21,900 in September 2003 to just 16,800 in September this year.

Not only are many more New Zealanders in work, but households are also receiving more income. Total gross labour income increased 7.5 per cent just between June 2003 and June 2004.

And surely it’s no coincidence that with unemployment at its lowest point in 18½ years, we enjoy the lowest crime rate in twenty one years – fourteen per cent below its peak in 1996.

We are now seeing marked increases in employment for Māori, for Pasifika peoples, and for other minorities – where high levels of unemployment had seemed entrenched.

In the September quarter of 1999, Māori unemployment was 14.8 per cent. Five years on, September 2004, it’s 8.3 per cent– down by 44 per cent. There are over 40,000 more Māori in work since Labour was elected in 1999.

Pacific peoples’ unemployment five years ago was 15 per cent. Now it’s 7.7 per cent, down 49 per cent.

Unemployment of other ethnic minority peoples five years ago was 9.3 per cent. Today it’s 6.5 per cent, down 30 per cent.

Our approach to social and economic development contrasts markedly with the earlier one dimensional approach which assumed that a single focus on economic growth would bring trickle down social benefit. That approach did not deliver. Today’s approach of directly investing in people and services clearly does support higher rates of economic growth and of employment.

We believe that investing in health, education, and housing does create a healthier, more skilled, more secure, and more productive society. The citizens of such a society are highly employable; they are prepared to take risks and take on new opportunities; and in a rapidly changing world economy, they are resourceful and adaptable. All these attributes contribute to a strong, dynamic economy which opens up more opportunities for people to achieve their potential and better their lives. A strong economy also provides the resources for further social investment; and so the ‘virtuous circle’ of social and economic development is created.

Guided by these principles, we have come a long way in the last few years towards putting social policy at the centre of the national agenda.

The importance of social reporting

We now have a regular Social Report, the annual ‘report card’ which monitors New Zealanders’ wellbeing in domains such as health, education, income, and life expectancy. Before the Social Report, governments had no system of social reporting; and no means of monitoring the progress New Zealanders were making over time and in comparison with other OECD countries. The Social Report data gives us those comparisons, monitors our progress, and shows us where we most need to target our investments. It gives us the evidence of where we are now, so that we can plan a pathway forward.

The Social Report 2004 places New Zealand in the top half of the OECD for two thirds of the indicators for which we have comparable international data. These include key indicators such as life expectancy, smoking, employment, and life satisfaction. New Zealanders are living longer lives, are better educated, and are more likely to be employed than 10 years ago.

The Social Report also shows that we still have some way to go. For example, while Maori and Pacific people are experiencing across-the-board improvements in social wellbeing, they are still faring less well than the population as a whole. New Zealand as a whole is performing less well than other OECD countries against a number of indicators, including obesity, child deaths from maltreatment, and adult literacy.

Next month the Government will release Opportunity for All New Zealanders. It is our framework for social investment, and shows how we will respond to the findings of the Social Report. Opportunity for All New Zealanders sets out the medium-term strategies of 34 government agencies which contribute to social wellbeing. We need a whole of government approach.

The launch of Opportunity for All New Zealanders means the Government will have a social counterpart for its framework for economic transformation, the Growth and Innovation Framework. It will enable us to communicate the nuts and bolts of our whole-of-government approach to improving New Zealanders’ lives. Future issues of the Social Report will continue to show our progress towards improving wellbeing, reducing disadvantage, and promoting equality of opportunity.

Five years ago, New Zealand had neither a regular system of social reporting, nor a strategic response to its results. Today, we have both to guide the Government’s significant social investment of $37.4 billion, or 78% of core Crown expenses, for 2004/05.

Evaluations

Over the next five years, a ‘real time’ evaluation of Working for Families will assess how well the package is working for low-and-middle income New Zealanders. The Government is investing $8.3 million in the evaluation. It will identify the effectiveness of Working for Families at getting people the assistance they are entitled to, helping them into sustainable employment, and having a positive impact on social and economic wellbeing for families.

Another ‘real time’ evaluation underway is of the Sickness and Invalids Benefit Strategy, a programme to support sickness and invalids benefit clients into work. This evaluation enables changes and enhancements to be made to the strategy on the spot. It enables the Ministry of Social Development to identify which parts of the country the strategy can successfully be expanded to, and which conditions must be in place for it to be of maximum effectiveness. It does away with the long timeframes of the traditional research, then policy, then delivery method which can mean the landscape has entirely changed between the research and the delivery phases. Real-time evaluations enable us to achieve results now while learning valuable lessons for the future.

Evaluation of targeted initiatives enables us to identify what will work at a grassroots level for specific communities, whether geographical or population-based. For example, we know that the Healthy Housing joint project between Housing New Zealand and District Health Boards is improving housing conditions in state house properties in areas of Auckland and Northland.

By extending homes for larger families, making design improvements, and by installing insulation, the project’s primary aim is to reduce diseases associated with overcrowding, such as respiratory and meningococcal diseases, rheumatic fever, and tuberculosis. Evaluations of the interventions made in 2002/03 showed that the collaboration between housing and health meant that state house tenants were not only enjoying healthier homes and consequently improved health, but also had a greater awareness of infectious diseases. Of those who had their hospital records tracked, there were fewer hospital admissions.

The Ministry of Health’s Aukati Kai Paipa programme offers smoking reduction initiatives for Maori women and their whanau. The evaluation done of the programme looked at whether it reduced smoking prevalence, whether it was culturally acceptable, and whether it was likely to be relatively cost effective. The evaluation found that the programme was appropriate, accessible, and effective. It led to a participants’ quit rate of 29 per cent, considerably higher than the latent quit rate of 12.5 per cent. Government funding for the programme is continuing, and the programme will be expanded as funding allows.

These targeted programmes and evaluations are small but vital parts of a much bigger picture: a picture of a nation which is regaining its status as a healthier, more secure, and better educated society. These outcomes contribute to New Zealand being more economically dynamic as well.

Conclusion

In conclusion, our government is committed to improving the provision and the uptake of policy-relevant social research in New Zealand. We are committed to ensuring that our social investments are targeted to achieve positive and sustainable results for all groups in our society.

We are not sitting on our laurels, thinking the job is done. We have to keep the momentum going, make the important social investments, and build strong foundations for sustainable growth and economic and social development.

For example, we are now looking at policies which could build the asset base and savings capacity of New Zealanders. Our rate of home ownership is falling – and that’s especially significant in a country where working people’s main assets have been their homes. So we are looking at policies to lower the barriers to low and middle income New Zealanders owning their homes.

Another area of work lies in the challenge for families of supporting their children into tertiary education. While we’ve done a lot in government to increase the affordability of tertiary education, there are still barriers facing low and middle income families. So we will look at ways of supporting families to plan ahead for the inevitable costs, not to replace what the government funds, but to be better prepared to meet the costs which fall on students and families now.

We are also looking at how to encourage workplace superannuation savings, to help people supplement their income from universal superannuation in retirement.

Rigorous analysis and evaluation about what works will enable us to make better decisions about where we should target our investments. It will help those working at the frontline in social policy and delivery make changes to their practice which are based on good evidence. It will enable new programmes and interventions to be designed to lead to the best possible outcomes.

The very nature of social policy means that there will always be more to do to improve the knowledge base and enhance our capability in identifying and understanding what works. There will always be challenges ahead.

I also want to affirm the value of the work those attending this conference do as evaluators, researchers, and advisors in helping build a better foundation for effective social policy.

I encourage everyone here to make the most of the opportunities presented over the next two days, to become better informed about what works to achieve good social outcomes. We, as a government, will continue to work with you.

I now have pleasure in declaring this conference open.

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