Minister for Social Services Christian Porter: Taking on the usual suspects. Credit:Alex Ellinghausen You can expect to hear a lot more from the Turnbull government about an "investment approach" to welfare. Porter describes the push as "maybe close to revolutionary". On first blush, the investment approach to welfare sounds like a smart idea. The basic concept is to put a dollar figure to the cost of future welfare payments and then invest money in programs which reduce that cost. Welfare recipients benefit by finding jobs. Taxpayers benefit by saving money. Win-win. The approach tells you nothing about what sorts of programs will be effective in achieving cost savings. But the data collected in the process allows you to track success over time.

The idea was introduced in New Zealand five years ago. Actuaries hired by the NZ government calculated an initial future lifetime cost of $NZ78 billion for all current welfare beneficiaries. Measured annually, that cost has since been reduced to $NZ69 billion through a combination of carrot and stick measures. As a carrot, the NZ government invested $NZ30 million in hiring full-time case managers for young welfare recipients. As a stick, single parents had their pensions cut off when their child turned 6, not 14 as previously. On the hunt for similar budget savings, the Coalition government paid $33 million to PriceWaterhouseCoopers in Australia to do a similar exercise. In contrast to the New Zealand approach, the PWC report tallies the future cost of welfare for all Australians – not just current welfare recipients – and also includes the cost of the age pension, which is excluded from the NZ calculation. Last month PWC came up with the impressively scary figure of a $4.8 trillion future welfare bill. However, nearly half that spending will be on Australians not at present receiving welfare, largely reflecting their future entitlement to the age pension. And by far the biggest single future cost for current welfare recipients comprises age pension payments: half a trillion. In his Press Club address, Porter announced groups for targeted interventions: young single mothers, young carers and students.

Quite how a report which identifies pensioners as the biggest cost to the welfare system was whittled down into this hit list of three remains unclear. A spokesperson for the Department of Social Services confirmed the three groups "were chosen by the Minister of Social Services" under department advice and were not recommended by PWC, as was widely reported at the time. *[see clarification below]. As yet, no policies exist to help the three target groups specifically. The government has set aside $96 million for a "Try, Test and Learn" fund. In December, applications will open for academics, state governments and not-for-profit groups to put forward projects to help these groups. But "help" is a broad definition of success. Porter has a more precise one: "Chosen plans will be subject to a simple basic metric of performance; does the plan improve lives by increasing self-reliance over time?"

Self-reliance. And this is the point at which the seductive simplicity of statistics morphs into ideology. Not everyone who moves from welfare to work has a better life. Sure, there are well documented benefits from having a job – a sense of purpose, camaraderie with colleagues, not to mention income. But sometimes, particularly for parents, meagre incomes can be more than chewed up by increased transport and childcare costs, forcing them into a new class of "working poor". The New Zealand investment approach was heavily focused on quantifying savings to the taxpayer with little emphasis beyond that on tracking outcomes, like quality of work, health, incomes etc. It has been forced to do more work to track these outcomes. It remains to be seen what policies the Australian government will pursue. Perhaps the three groups targeted will indeed benefit from special interventions. Perhaps they would also have benefited from the $1.5 billion the Coalition has stripped from community services, according to the Australian Council of Social Services.

Without doubt they would benefit from fixing aspects of the tax system which mean low-income earners face huge disincentives to work through the introduction of taxes and withdrawal of benefits. The best that can be said today about the embrace of the "investment approach" is that it will yield the concrete data we need – if the government releases it – to decide if these constant and arbitrary attacks on single mums and students bear the fruits conservatives are so often convinced they will. A revolution in welfare? More like plus ca change. *Clarification: Subsequent to the publication of this article, a spokesperson for the Department of Social Services clarified that: "The three initial target groups were among a wider list of groups identified by PwC and were recommended by the Department as the initial focus for the Australian Priority Investment Approach to Welfare, and put forward in advice to the Minister, who adopted the advice."