Looking ahead | Te anga whakamua

Te Pae Tawhiti Transformation Programme

We will transform how we serve New Zealanders

Te Pae Tawhiti Transformation Programme is our multi-year transformation to modernise the payments and public employment systems, while future-proofing the welfare system and enabling a more strategic approach to commissioning. It is guided by MSD’s strategic documents Te Pae Tawhiti – Our Future, Te Pae Tata and Pacific Prosperity.

The programme will transform MSD’s underlying business processes, technology and payments engine to enable a fit-for-purpose service model.

We are focused on three areas: work, partnering and payments. This means:

• giving the right level of support to help clients get work-ready, get into work and stay in work
• working better with partners and reducing red tape so they can focus on helping people
• making sure people get the right financial help and reducing debt caused by overpayments.

MSD’s transformation aims to:

• modernise the core government payments system and redesign how MSD delivers services, making processes more efficient and effective
• make transactional tasks easier so clients can do more themselves and we can focus on people who need extra help
• provide modern, stable technology to be able to implement government policy more easily.

Preparing for transformation

We are continuing to develop our core operational foundations. This work includes developing cloud platform services, improving system security, enabling digital access to services, improving integration between systems and improving access to and use of data and information.

The Service Experience Platform and Digital Employment Service elements of our transformation are the critical building blocks to delivering integrated services and support. Together they will secure the technology, processes, tools and workforce capabilities we need to work more efficiently and effectively across income support and employment. We have completed procurement for our transformation partners to support the delivery of these service changes.

We are working with other social sector agencies to align our contracting and commissioning processes. The aim is to have communities and providers spend less time on administration and more time supporting people to achieving better social outcomes, including employment. We have begun work to establish a modern contracting and commissioning system to support a new partnering model.

We have also begun developing a Practice Framework and Model, which includes the detailed design of how our frontline staff will work with clients and partners to support people into employment or meet other support needs. We will pilot these components together with the necessary technology changes before rolling them out nationally.

This is an ambitious programme which we plan to deliver in stages – the first stage will take us through to 2026.

Budget 2024

Savings

As part of Budget 2024 and the Government’s fiscal sustainability targets, MSD supported the Minister for Social Development and Employment to review MSD’s expenditure, with a focus on:

• alignment with government priorities
• evidence of effectiveness and value for money
• risks/impacts of stopping the programme/initiative.

To achieve the MSD savings target of 6.5 percent of eligible baseline, Budget 2024 included $792.42 million net savings over the forecast period, including cross-Vote impacts. This comprised:

• $350.546 million from tightening emergency housing gateway settings and continuing support services. This initiative ensures emergency housing is targeted to those who have a genuine need and have met their obligations
• $150.957 million from including boarders’ contributions in the calculation of subsidies for private and public housing. This makes the assistance fairer and more sustainable where accommodation costs can be counted more than once in the calculation of subsidies
• $154.864 million from MSD’s departmental expenditure through reductions in spending on contractors and consultants, operating costs (such as travel, stationery and cleaning) and MSD’s workforce
• $83.132 million returned from time-limited initiatives, such as COVID-19 departmental funding, Growing the Capability of the Social Sector Fund and scaling the number of Community Connectors from 100 to 50 full-time equivalents (FTEs)
• $52.921 million from ceasing the design and implementation of a wage supplement to replace minimum wage exemption permits and ending the Community Innovation Fund.

New spending initiative

In addition to the fiscal sustainability focus, Budget 2024 provided $81.869 million in new funding over two years to enable MSD to assess a further 2,000 claims of historic abuse in care.