Part 2: Operating environment
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The social development portfolio is responsible for addressing some of the most complex social issues affecting New Zealand society. These issues are often intergenerational and cannot be addressed by any one agency or service provider.
No single factor drives poor outcomes for children and families. It is when multiple challenges or disadvantages are present, often through multiple generations, that poor outcomes are much more likely. Material wellbeing, family income, affordable and good quality housing, employment, education and skills all play roles in current and future wellbeing.
Social sector state and trends
Progress is being made on a number of enduring social issues, but challenges remain
New Zealand society has many strengths, including a lack of corruption and a relatively open and tolerant culture. The economy came through the global economic crisis in good shape compared with other developed nations and unemployment rates remain relatively low. However, there are enduring social challenges including intergenerational poverty, family violence, high levels of child abuse, and housing affordability. Progress is being made on these issues but ongoing attention is required to achieve lasting change.
New Zealand’s demographic profile is becoming more diverse and is ageing
New entrants to the labour market will increasingly be Māori, Pasifika and Asian. All young people, but particularly Māori and Pasifika, must be equipped to compete in the labour market to keep the economy competitive, reduce levels of welfare dependency and grow the tax base to support the growing older population. Supporting the needs and employment prospects of the 24% of New Zealanders who identify as having a disability or long term impairment is also important. Migration and increasing diversity contribute to the economy but may have implications for social cohesion.
The move away from rural areas to large urban population centres has increased the vulnerability of some rural communities. These communities face particular challenges, with limited access to jobs and social services, declining community resources, declining house prices and a smaller population base to cover rates and amenity costs.
The ‘baby boomer’ generation is beginning to retire. This will impact on the provision and cost of New Zealand Superannuation, and affect the residential care sector, health services and social connectedness. There is also a growing group of people nearing the age of eligibility for New Zealand Superannuation (aged over 45) with limited private retirement income and few assets.
The pace of labour market change is accelerating with the rapid diffusion of new technologies and the impacts of globalisation
As the economy improves, employment opportunities are increasing. Labour market changes mean that new occupations will emerge and some existing occupations will decline. Declining birth rates and an ageing population in much of the world are driving international demand for skilled workers and this is impacting on migration patterns. Improving the connection between labour market demands and the tertiary education sector will play an important role in ensuring New Zealand has the skills necessary for the future.
The cost of housing has increased dramatically
Poor quality housing and overcrowding are impacting on the transmission of infectious diseases, particularly rheumatic fever and respiratory issues.
Housing costs have increased dramatically over the last 20 years. Coupled with supply issues, this has led to declining rates of home ownership. Low-income people and families are less able to rent in the private market, increasing the demands on the social housing sector. Housing costs are a major contributor to child poverty and material deprivation.
Māori continue to be over-represented among people needing support, with too many experiencing negative social, health, justice and employment outcomes
Addressing this persistent over-representation and improving outcomes for Māori is a priority. Recent Treaty settlements have provided iwi with significant financial resources, though these are likely to be mainly invested in safe financial mechanisms in the short to medium term to ensure their inter-generational viability. Once iwi are more financially secure, there may be opportunities for local investment and the creation of employment opportunities. In the meantime there are increasing opportunities for iwi to partner with Government to address persistent social issues.
Understanding what works in the social sector is complex
The Ministry faces a growing demand for its services and supports. Although the New Zealand economic outlook is improving, tight fiscal restraints require funding to be targeted to where it gets the most effective results.
Attributing changes in behaviour and outcomes to a specific intervention is difficult, particularly as families and individuals may be receiving a range of supports. However, the meta analyses, longitudinal studies and systematic reviews that are more widely available, along with the increased use of data integration and analytics, are helping improve understanding of the effectiveness of interventions.
The new longitudinal study, Growing Up in New Zealand, will be an important source of up to date evidence on the experiences of this current generation of children and their families.
Cross-government leadership
Addressing the most complex issues requires agencies to work with each other, providers, interest groups and the community
There is an increased emphasis on sector-wide accountability for addressing the entire needs of an individual or family. The Ministry’s Chief Executive is currently responsible for leading action to reduce long-term benefit receipt and the cross-agency efforts to achieve results relating to the support of vulnerable children. The Ministry also supports the delivery of other results to boost educational achievement, reduce crime and improve access to online services.
This focus on a set of shared targets has influenced the Ministry’s key priorities and work programmes, supported a shift to greater interagency collaboration and driven more effective use of data to target interventions and inform choices.
The Social Sector Forum provides cross-agency leadership in the social sector
The increasing oversight of, and accountability for, interagency initiatives through sector bodies provides an opportunity for assessing the choices and trade-offs that fiscal constraints require. This may sometimes mean that collective imperatives supersede individual departmental objectives.
The Social Sector Forum (SSF)2 is currently mandated by, and reports to, the Cabinet Social Policy Committee. Recent practice has been for the Chair of the Cabinet Social Policy Committee to lead cross-agency work in the social sector. SSF collectively governs and drives cross-agency work in the sector to achieve better results for individuals, families and communities.
As Chair of SSF, the Ministry’s Chief Executive has the lead responsibility for cross-agency work. He also chairs two associated governance groups - the Joint Venture Board, which oversees the Social Sector Trials, and the Vulnerable Children’s Board, overseeing the Children’s Action Plan.
SSF has prepared a Briefing to the Incoming Government that will give you more detail on cross-social sector leadership and its current areas of focus.
The Ministry is the Functional Lead across government for property
The State Services Commission has established Functional Lead roles to drive performance and efficiency across the whole public service in the areas of IT, procurement and property.
As the property lead, the Ministry is responsible for using the collective purchasing power of the public service to drive cost reductions and actively exploring co-location opportunities to make the most efficient use of space and resources. Property savings across the public sector are expected to produce approximately $109 million per year by 2023.
Responding to the Ashburton Work and Income office tragedy
The Ministry is committed to providing a safe working environment for its employees and has a zero tolerance policy towards threatening behavior
The events at the Ashburton Work and Income office on 1 September 2014 highlight the potential risks and dangers faced by the Ministry’s staff at the front line. The Ministry employs over 10,000 staff who work at around 300 locations in New Zealand. The Ministry is committed to providing a safe working environment for its employees and it is unacceptable for people to threaten Ministry staff who are carrying out their professional duties.
Following this incident the Ministry implemented new security processes across its sites, including additional security staff and controlled access at all Work and Income sites. We also initiated a zero tolerance policy towards threatening behaviour at all our sites. Every threat is taken seriously and is dealt with swiftly by the Ministry and the New Zealand Police.
The Ministry is implementing an independent review into its security environment
The Ministry regularly reviews its security protocols and site safety plans but following the Ashburton incident it has been appropriate to undertake a further examination. An Independent Security Review into the Ministry’s security environment was commissioned, with the objectives of:
- determining whether all practicable steps were taken to ensure the safety of Ministry employees in relation to the shooting at the Ashburton office
- developing recommendations for changing the physical security environment in Ministry workplaces to ensure the safety of staff and members of the public from threats and assaults.
The first phase of the review has focused on public-facing service centres, including those where the Ministry is co-located with other agencies. The second phase will look more broadly at remaining Ministry workplaces. The reviewers are supported by an external Advisory Group that is testing thinking and emerging recommendations.
The Ministry will keep you fully informed on the progress of the review and its findings. We are keen to discuss the report on the first phase of the review with you at your earliest convenience and we will keep you informed on the progress of the second phase. It is highly likely that the review will lead to changes in the way we engage with the people we work with and a lower tolerance of poor behaviour towards staff.
Christchurch and the Canterbury rebuild
Ministry is part of the integrated, multi-agency approach to the Canterbury recovery
The Ministry continues to play an important role in initiatives across the Canterbury region, including providing corporate support services to the Christchurch Earthquake Recovery Authority.
Supporting the psychosocial recovery of people affected by the earthquakes is a critical challenge. Research suggests the third and fourth years following a disaster can be the most difficult for people to deal with, as they experience issues relating to secondary stress, temporary accommodation arrangements, overcrowding, and mental health problems. The severe nature of the earthquakes and the magnitude of the rebuild mean that these effects are likely to be seen for up to 10 years. To address this, Earthquake Support Coordination Service, counselling services and community organisations are receiving funding so they can provide individual and family support and community resilience initiatives.
Staff continue to be affected by the events of the last three years
The accumulated impact of the earthquakes, rebuild and repair issues, the increase in flooding in some parts of the region, and the recent Ashburton tragedy, have had a significant impact on our staff and on the people we work with. We are actively working to support staff as they face these issues and we have appointed a wellbeing advisor with a special focus on these staff.
The rebuild and repair programme provides opportunities to support people to move into more sustainable work
Unemployment in the region decreased to 3.3% in March 2014 (from 5.5% in March 2013), the lowest rate in the country. Youth unemployment has dropped significantly to below the national average and the numbers of people on a benefit are at the lowest since 1996. Initiatives are in place to support the flow of labour from other regions to meet demand in Canterbury.
Particular issues relating to housing supply, demand and affordability exist in the region. Significantly fewer properties are available for low income earners and homelessness and the demand for emergency housing are increasing. The number of displaced households is expected to peak at approximately 3,000 by the end of 2014, placing pressure on social housing services.
The Greater Christchurch Recovery Briefing to Incoming Ministers sets out further information on the services to support the post-earthquake recovery in Canterbury.
Auckland
Auckland is the largest and fastest growing region in New Zealand, resulting in a wide diversity of social outcomes
Auckland now represents one-third of New Zealand’s population. Its economy generates the highest average household incomes in New Zealand and provides by far the greatest number and range of job opportunities.
However, size and growth are pushing up land prices so that, when regional housing costs are taken into account, Auckland’s incomes are lower than those in Wellington and the West Coast, and are similar to those in Waikato, Taranaki and Southland. This places particular pressure on housing options for people with lower incomes.
The region also has a wide variation in living standards, education achievement, health outcomes and workforce participation. The region contains concentrated pockets of high deprivation with very poor social outcomes.
Improving outcomes requires a collaborative effort by all agencies working in the Auckland region. The Ministry is working in partnership with the Auckland Council and local communities to reduce overlaps and tailor the delivery of services to better meet the diverse needs of the region, to help increase income levels, address poverty issues, and create a skilled future workforce.
Fiscal challenges
Sustaining high quality services within tight financial constraints is a key challenge
New Zealand’s immediate economic outlook is strong. However, as an organisation the Ministry faces increasing financial pressures driven by population changes, operational demands and inflation.
The Ministry has a history of finding efficiencies and productivity gains to offset cost pressures. Savings of $240 million have been identified over the next four years, and a major simplification project is underway to reduce costs by improving business processes. This project is expected to help address the estimated financial gap of $60 million by 2017/18 indicated in the current Four Year Plan.
To continue to manage within baselines, spending needs to be directed towards high-priority areas. We need to continuously look for opportunities to improve efficiency, prioritise expenditure and make sure the services we invest in are targeted and underpinned by a strong evidence base for what works. Building capability to do this is a priority for the Ministry.
