Measuring the economic impact of Whānau Ora programmes: He toki ki te Mahi case study

Abstract

In May 2017, the AERU was contracted by Ihi Research and Development to perform a cost benefit analysis of an initiative funded by Te Pūtahitanga o Te Waipounamu under the Whānau Ora programme. The chosen initiative was He Toki ki te Mahi, which supports participants to obtain and complete apprenticeships in the construction industry. This research report presents the details of the AERU analysis. The net present value as at 30 June 2017 of potential economic benefits from increased capabilities being achieved by the participants in the initiative to date is estimated to be above $5,500,000. The initiative received funding of $250,000 in its first year (including provision for significant set-up costs) and $80,000 in its second year. The analysis allows for a further four years of funding at $80,000 per annum to provide support for the current cohort of participants. These costs are funded from general taxation, and so the analysis makes an allowance for the deadweight loss of taxes, raising the total cost to $780,000. Thus the analysis finds that He Toki ki te Mahi has the potential to return seven times its cost in economic benefits.