'Social investment' may see better return

Dick Hubbard says the country can't afford a society that fails.

It may sound strange.

A group of business leaders urging the Government to give business a greater role in helping develop and implement social investment policies.

Yet research commissioned by the New Zealand Business Council for Sustainable Development, of which I am a founding member, and released this week, finds that some of the billions the country pours into "social protection" - maintaining incomes, health, welfare and prisons - might be saved if effort were redirected into "social investment", specially to reduce unemployment and sickness.

While the Government commits about $33 billion of its $45 billion a year in social-sector spending to "social protection", the country is failing to address and redress inequalities which carry with them a staggeringly high price. -The cost to society of a chronically antisocial adolescent male has been estimated at $3 million.

Not treating deep-seated antisocial behaviour is even more expensive.

While average educational achievement in New Zealand is among the best in developed countries, there is a widening gap between top and bottom performance rates.

The number of people of working age on a benefit has risen from 2% in 1960 to 13% in 2010; New Zealand ranks 29th of 30 OECD countries for youth unemployment and almost 30% of the jobless here are aged 15 to 19, compared with 12% in OECD countries overall.

New Zealand ranks bottom in the OECD on child poverty: nearly 60% of all children in households where adults do not have work are impoverished.

While New Zealanders' health and life expectancy are good, males in least-deprived areas could expect to live 8.9 years longer than those in the most-deprived areas.

Meanwhile, Treasury's long-term forecasts say we can't afford welfare, health and prisons in their present forms by 2050.

The system is becoming increasingly inadequate at ensuring equal opportunity for all New Zealanders.

An extra focus is needed to divert some of this to social investment.

Some spending might be avoided if more were invested in high-quality, future-focused ways to prevent the escalation and entrenchment of problems, particularly for those most at risk.

Social investment will provide resources and support for individuals, families and communities - to build on their strengths and improve their social and economic wellbeing over time.

Why should business research this and be so concerned for change?It has a big stake in ensuring there is equality and people are well educated, cared for and healthy.

Business can provide part of the answer: it has people, skills, scale and capability to develop capacity in the community and build "social capital".

It should be involved, especially when employment is likely to be part of the solution.

The business council believes sustainability for business is about achieving profits while looking after people and the planet.

Business cannot succeed in societies that fail.

Nor can it financially contribute much unless it is profitable.

Handled properly, when a business gets involved in social issues, it becomes an investment not a cost.

Business has a direct interest, as an employer, taxpayer and citizen, in how well our society meets the needs of its members.

It directly benefits from the performance of our schools and youth organisations and pays more taxes when the social fabric is torn and the ability to do business is compromised.

So the findings of the research business council members have funded over the past two years urges a place at the table for business when we set social investment priorities.

It should do this together with government and the not-for-profit sector.

This would cover priority issues such as. -Youth at risk, unemployment and family violence.

What other Government and not-for-profit programmes work best.

How we can scale those into successful projects nationwide.

How we measure what does work so we can ensure donors or volunteers will see a community return on their investment.

In this way, social investment policy-making and implementation will be well co-ordinated and more effective.

Our charities and volunteer sector is not small: it makes a 4.9% contribution to gross domestic product, valued at about $7 billion a year, when volunteering time is taken into account.

This is about the same as tourism.

Maybe, when Government, business and the not-for-profit sector get together, we will find some better ways of preventing social problems such as child and health neglect, unemployment, and crime, or stop them escalating at higher cost to us all.

Dick Hubbard is one of the champions of the New Zealand Business Council for Sustainable Development's project on the social role of business. He founded Hubbard Foods, is a founding member of the business council and a former mayor of Auckland.


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