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Social capital and social development - Maharey

Hon Steve Maharey
13 November 2003 Speech Notes

Social capital and social development - enabling New Zealanders

Address to the Annual General Meeting of Philanthropy New Zealand. Turnbull House, Wellington.


Thank you for inviting me to join you today.

I value the opportunity to share with you the work being guided by this Government in building social capital, and encouraging social development.

These areas are of keen interest to us both, being critical pathways to our shared goal of enabled, responsible New Zealanders.

Like the Government, philanthropists are in the business of distributing resources for the benefit of others. We are concerned with the same social outcomes. But philanthropists are not a source of substitute funding; you are not here to pick up the pieces that Government misses.

Rather, your work enables the Government to target the areas where we can be most effective. You enable us to focus on what we do best, and not duplicate the things that you do as well as, or better than, us.

That we distribute our resources in the most effective and productive way is a driving force of this Government’s social spending. This requires us to work in partnership with, not patronage towards, organisations like Philanthropy New Zealand.

Partnership is very much the touchstone of the approach we have encouraged since taking office.

Partnerships within and across the state sector; partnerships with local government, with communities and individuals, and partnerships with organisations such as yours.

It is a strong belief of this Government that solving New Zealand’s complex social problems is a task that extends far further than the steps of Parliament. This is not an absolving of central responsibility; rather an acknowledgement that real and enduring solutions are often best developed and implemented at flax roots level.

To build social capital in New Zealand, the Government, the profit sector, and the not-for-profit sector need to think creatively about ways they can work together. Complementing, not duplicating, each other’s functions.

Finding solutions begin with a vision of what we want for this country.

A vision for New Zealand

Our vision is for a New Zealand that is inclusive, prosperous and environmentally sustainable.

Such a vision implies that long-held kiwi tradition of fair play. The people of New Zealand want this nation to be a place where all are able to achieve their full potential. New Zealanders want a nation where all can enjoy a vibrant and growing economy. And they want not only today’s generations but also those of tomorrow to be able to enjoy the unique environment of Aotearoa.

The desire to achieve inclusion is hardly new. The advent of the welfare state in this country - under the Michael Joseph Savage labour government - was the great hope of the Thirties for solving the problems of poverty and social exclusion.

As the concept of social welfare developed, the primary relationship to emerge was between the central state and citizens. And the means by which the state addressed poverty and exclusion of citizens was through income transfers - benefits - provided on a ‘one-size-fits-all’ basis.

This approach served New Zealand well during the 1950s and 60s. But as well intentioned and apparently helpful as this was, the methodology positioned the poor as passive recipients of welfare.

And passivity has little place in the third millennium.

Changed times

Life in the 2000s is distinctly different from the 1950s. How we work and where we work have changed. No longer do we have a job for life. No longer are we a predominantly farming and manufacturing workforce.

Increasingly, we are working in a global knowledge society where many jobs involve juggling information; where investment in human capital is key.

Change can be seen in our families. We no longer fit the mum-dad-and-two-kids model where mum stays home and dad goes to work. Family types and circumstances in 2003 are various and diverse.

It’s perhaps not surprising then, that the centrist model of welfare of half a century ago no longer fits this third millennium population.

The lack of fit is evidenced by the rise and rise of people on benefits that occurred over the 1970s and 80s. This rise was not merely due to tough economic times. It was the sign of a system increasingly out of kilter with the society it served.

During the 90s we saw the attempt to address the underlying changes in New Zealand society through the work for the dole reform.

That centrist welfare was out of kilter for 2000 and beyond is unarguable; but does that mean it is irrelevant? I contend no. Today we face considerable social and economic change. Change that brings risks and opportunities.

We need a new approach. An approach that provides protection from the risks of change, and invests in creating opportunities. These two elements, protection and investment, are at the heart of social development.

A new approach

Social development is a new direction for welfare. It moves beyond the old, centrist model of Government simply paying out benefits.

Social development is a process of coordinated social change that promotes the well-being of the whole of a society - not just parts. It involves tackling the underlying causes of people's problems rather than throwing money at the symptoms.

Fundamental to this new direction is that social development acknowledges mutual responsibility of both government and welfare recipients.

It implies government investment in people through training programmes, education and help in transitioning to employment. But it also demands responsibility from welfare recipients – that they will take up the opportunities made available to them.

Social development works to provide those opportunities that can help people move out of welfare dependency.

This sees Government’s role shifting from providing a hand out to a hand up.

Investment such as training and education comes at a high price. But the long-term dividends, too, are high. And they are dividends that we all can share in – lower crime rates, lower health costs and improved economic growth.

Local solutions for local issues

This is not a transformation that government alone can achieve. Despite the desire, Government does not have the panacea to fix everything.

While effective in delivering mass rights and entitlements, central Government itself is not a builder of communities. It is the community leaders such as yourselves who are best positioned to create the connections and networks that foster social capital.

It is these champions who will provide the bright ideas and inspiration to find effective local solutions to health, education, social and employment issues.

These champions do the hands-on work of building social capital. When I use the term social capital, I mean the value we as communities gain from co-operative and supportive social relationships. From community networks and inclusion.

We know that social capital is integral to the success of social development.

Research tells us that the stronger the social capital within a community the greater the likelihood of economic and social development. Social capital spins a web of relationships that connect people and enable them to access information and jobs and to cooperatively achieve community goals.

Building social capital, though, is not solely the preserve of social entrepreneurs. The Government has several initiatives underway that focus on the key elements of social capital: communication, inclusion, and access to services.

Work and Income has established a multi-lingual call centre in its Auckland Regional Office. The call centre provides separate 0800 lines for callers to receive Work and Income information in seven languages: Cantonese, Mandarin, Tonga, Samona, Hindi, Maori, and Arabic.

Heartland Services is a cross-government initiative that improves access to government services for people in provincial and rural New Zealand. Healthland’s outreach service ensures that representatives from different government agencies co-ordinate their visits to isolated towns. Service centres in those towns provide one-stop-shop venues for these representatives to use.

Strong communities begin with strong families. One of the programmes the Government invests in is Family Start. This community-based programme was developed to improve life outcomes for children in families at risk. Family Start provides intensive support services for up to five years, aimed at improving children’s wellbeing and development and parents’ and caregiver’s parenting capability.

These initiatives, and others like them, all contribute to building social capital and creating the groundwork for more.

This is the beauty of social capital: the more you have, the more you get. The key, as I said earlier, is to think creatively about how we can work together. To focus on partnerships.

Social entrepreneurship offers a channel for partnership.

Social entrepreneurship: a builder of social capital

Social entrepreneurs are leaders, innovators, and community champions who work to improve the economic and social well-being of their communities.

Social entrepreneurs and philanthropists have a freedom to experiment and to work outside the constraints applying to government enterprise.

This freedom is vital to their effectiveness. And the suspicion that entrepreneurs and philanthropists may have that associating with government inhibits that freedom is not totally unwarranted.

However, there are a number of examples that demonstrate how government can contribute to the work of the not-for-profit sector without constraining their freedom.

Right now we are in the process of establishing the Charities Commission. The Commission will begin operating in July 2004 with the purpose of helping charitable organisations meet their existing regulatory responsibilities. The Commission will also administer a registration system that will be the defining feature of tax exemptions. In these ways the government’s role is that of enabler.

The Social Entrepreneur’s Fund established in 2001 supports community leadership and innovation that build social capital and community wealth.

Administered by the Community Employment Group, the Fund this year helped 51 community champions to further their work. The range of activity was diverse – from creating change in recidivist criminals through therapeutic theatre to researching the use of Maori land for native plants and lavender farming.

Geoff Chapple is an inspirational social entrepreneur who has made good mileage in building social capital with help from the Entrepreneur’s Fund. The first person to receive a grant from the fund in October 2001, Grant has been industrious in developing Te Araroa – the long path – a walkway that will span the length of the country.

Geoff used the grant to complete the Cape Reinga to Bluff journey, a step in the Te Araroa Trust’s goal to secure a 2,600 kilometre stretch as a legal route by 2005.

In walking his dream Geoff has shown the unstoppable attitude of social entrepreneurs. He’s also made a considerable impact on employment opportunities within communities throughout New Zealand.

Attitude is a key attribute of a social entrepreneur. In my assessment there are four other defining features of social entrepreneurship.

Firstly, social entrepreneurs are firmly rooted in their local or community environment. This provides the strong foundation for empowerment and for effective process.

Secondly, the initiatives have a strong focus on outcomes that are real and tangible. That is - they fix things or they get things unstuck. You could call it social plumbing.

Thirdly, social entrepreneurship is about growing social capital. And the way this is achieved is very much in line with commercial principles.

Lastly, social entrepreneurship is about partnerships. Partnerships between social entrepreneurs and business, and between social entrepreneurs and local and central government. Such collaboration allows us all to capitalise on the strengths of each partner in achieving a far greater result than if we worked as individuals.


This Government is keen to build on its support in fostering social entrepreneurship and supporting local champions.

Several such champions are among you this evening. One is your chair, Judith Timpany, a recipient of an award from the Social Entrepreneur’s Fund in June this year. I understand Judith used her award to investigate the philosophies and practices of community development grant makers in the United Kingdom, Canada and America.

And I know this is to feed into the work your association is doing on promoting generosity and its interrelationship with philanthropy.

All of us gain a sense of satisfaction from seeing the enabling of our fellow New Zealanders that results from giving. Indeed, I contend that philanthropic organisations are social capital’s ‘genuine article’. The very existence of philanthropy is a strong indicator of a healthy society.

With strong, socially focused partnerships forged across all levels of New Zealand society - whether profit or not-for-profit - what we will see materialise is a vibrant and robust, and truly inclusive, nation.


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