Finance Minister Willis has declared its business-as-usual in Wellington, where insiders get the top jobs, and tax-payer funded window-dressing is the order of the day. Her new Social Investment Agency was never her idea - she picked up that hobby horse from one of her old bosses, Bill English. What is the "social investment approach" anyhow? Its a mathematical technique that relies on actuarial modelling. For example, maybe there's a scheme that proposes spending public funds to improve child health-care, whose main effect may be to reduce poorer health outcomes when children get older, in turn reducing future health-care spending. The public cost of the scheme can be weighed against the future fiscal savings to society. Actuaries can put probabilities on the likelihood of the better future outcomes to estimate whether the scheme makes financial sense. The Ministry of Social Development has already been employing actuaries to do these sorts of calculations.
