Carmel Sepuloni: rebuilding the social safety net

Social Development Minister Carmel Sepuloni on the day she was sworn in with Governor General Patsy Reddy and Prime Minister Jacinda Ardern. Photo by Lynn Grieveson

Carmel Sepuloni has inherited Bill English's social investment approach. She's not throwing it out, but she'd prefer to rebuild the social safety net rather than just targeting those who might fall through. Thomas Coughlan reports.

On Wednesday night in Wellington, a group of academics, policy wonks and politicians gathered to launch a book on social investment, the signature welfare policy of the previous National Government.

They were also there the hear a speech from Carmel Sepuloni, the new Minister of Social Development, the woman now in charge of the Social Investment Agency and, by extension, the social legacy of the Fifth National Government.

The book's co-editor, Jonathan Boston, speculated in an earlier interview with Newsroom whether Sepuloni would use the launch to announce what would be done with the agency. The timing was good. Labour had been making noises about keeping certain elements of the National-branded policy and there had been some political pressure building for the Government to come forward with specifics, not least from Bill English, who derided Labour's approach in an interview with Newsroom last week.

But Sepuloni didn't announce any major movement in the agency. She delivered a speech that solidified statements made on the campaign trail and laughed at a some good-natured joking from Boston about having to rewrite the tense of the entire book after National lost the election. The National Government became the former National Government, the Minister for Social Development, the former Minister for Social Development.

Sepuloni isn't the sort of person who would be pressured into making announcements on the hoof. Talking with Newsroom in her Beehive office earlier on Wednesday, she admitted that while an announcement on social investment was in the pipeline, she was no fan of social policy implemented in a rush.

"It's about not being in a rush to roll it out because that's where problems occur and that's what we've seen with the previous government," she said.

Bill English's approach to social investment was reminiscent of a Silicon Valley 'move fast and break things' approach. Social Investment was his radical idea, and he wanted it implemented quickly.

Sepuloni, by contrast, wants to savour the luxury of inheriting the policy.

"We've come in at a good time because it's fortunate for us as a Government that so much has been done analyzing and critiquing and discussing what social investment is about. We can look at the National Government's model in terms of what was good what wasn't," she said.

English and Sepuloni are not dissimilar politicians. Both are wonkish when it comes to policy and one gets the sneaky suspicion that they get more than a little frustrated with the petty politics that sometimes get in the way.

"We were pushed to go one way or the other when we were in opposition, now we're in Government it's either roll over and accept that Bill English had a genius idea or declare war against social investment," she said.

"It's impossible to go one of those ways. I love the term investing in people and that's what it spells out to me."

Of course, it's easy to be gracious in victory. Sepuloni has already begin implementing her own approach to social investment and, in three, six, or maybe even nine years' time, she too will have to face judgment for how the policy has been handled under her watch.

She was quick to scrap the collection of highly personalised data. This got the National Government into trouble last April when the Privacy Commissioner, John Edwards, reported that the Ministry of Social Development's data-collection was too intrusive.

She says that the government's IDI (integrated Data Infrastructure) system and other, less intrusive data collection is sufficient for her Ministry's needs. English's response when I put this to him last week was that a Government couldn't help people if it didn't know who they were. Sepuloni thinks differently.

"Social investment is about informing policy that will impact more that one individual," she said. "That means when collecting information in an anonymized way and that gives us really crucial data in terms of what services have been effective, where people are having challenges and what work could be happening in different spaces and maybe what's not working."

She disagreed quite strongly with English on this point - even arguing that his form of data-collection was more hindrance than help.

"Bill English was saying he had this information about one person's life and he could match it up, we could help them more effectively, but the point has been made by NGOs and by clients themselves that if they feel like that data-collection is going to happen then they won't access the support they need and that's dangerous," she said.

English's approach, though often controversial, did chalk up some significant successes against things like rheumatic fever that had bedeviled governments for decades. Sepuloni's less granular approach may be popular with clients and NGOs at the moment, but ultimately it will have to face the same level of scrutiny and judgment as English's, and she knows that making change in the world of welfare is slow and difficult.

"The siloed nature of agencies and organisations isn't something that any government has got right yet, including the last government, the one before, the one before that," she said.

Predictive risk modelling

Another of English's tools Sepuloni strongly dislikes is predictive risk modeling. This allows the government to use data to work out whether someone is more likely to fall into welfare dependency or go to prison.

"You're imposing on people right from the start this deficit frame," she said.

"If you say the only reason we need to invest in you is the risk of you falling into these really negative categories. We should say the reason we need to invest in you is that you have a huge amount of potential and we need to maximize that for your benefit, for your family's benefit and for New Zealand - that's a huge contrast."

Critics would say this is a semantic difference. Investment so that someone gets a good job and has a fulfilling life is more or less the same as helping someone stay off welfare and out of jail. English himself was dismissive of this approach.

"The people where it makes the biggest difference already know they're vulnerable," he said. The attack on these points were, for English, a symptom of the left's difficulty to come up with an attack on a centre-right party creating social policy that was better than their own.

But Sepuloni won't budge in her critique of the deficit base.

"For me as a former teacher and a person who has been in the education sector if you start with that kind of deficit base then you are setting yourself up to fail," she said. People who are told they are vulnerable, that they are at risk of failing, are more likely to fulfil that expectation.

Disproportionate universalism?

Sepuloni's other great shift will be to implement Labour's policy of proportional universalism. This is likely to come in the form of what policy wonks call 'broad spectrum' interventions that touch a large number of people, rather than a specific, targeted few. One example cited in Britain is of free nurse visits for all children aged up to six. The visits are designed to find a group that could be more vulnerable, and then once the most vulnerable are found, they then receive extra services proportionate to their need.

Jonathan Boston said in an interview with Newsroom these come at a greater cost than the narrow spectrum interventions favoured by National.

English also noted the cost of broad spectrum interventions.

"The biggest single spend of this government is on the first year of free tertiary education. It makes no difference to anybody and the opportunity cost of that is huge," he said.

This will be a big issue for the new Government. Locked into its fiscal responsibility rules, committing it to reducing debt and keeping the level of Government spending as a percentage of GDP stable, Labour might face some difficult choices when it comes to choosing between broad-based vote-winners like free tertiary education, and more granular, specific interventions favoured by English.

Sepuloni thinks the issue is one of justice. If English and nearly every other politician had a free tertiary education, why shouldn't Labour scrap fees?

But what about the opportunity cost - who misses out so that students can study for free? The issue of opportunity cost is one Sepuloni struggles to answer.

"It's about proportionate universalism. There are people with high and complex needs and yes they need additional support … but the group of people that I'd be concerned about is that tier of New Zealanders who don't have high and complex needs, but are really on the brink," she said.

"It wouldn't take much for them to fall into that at risk category. Someone loses their job, someone becomes really unwell really quickly and unexpectedly and all of a sudden we're in the difficult predicament."

Sepuloni believes in rebuilding the social safety net rather than targeting the people who fall through it. But that costs money and doesn't exactly answer English's pointed question about the opportunity cost of Labour's big ticket spends.

Public finances are tight and a tax increase courtesy of the Tax Working Group is another Parliament away. It's likely that over the course of the next three years the Government - Sepuloni in particular - will have to make some tough decisions about what make the best social investments.