And it begins.
Private investors are about be given the opportunity to invest in and make money from the provision of social services.
ONE News understands that this week the Government will announce plans to issue New Zealand’s first ever social bond for the provision of some mental health services.
Social bonds, like financial market bonds, are essentially an I-O-U which pays interest.
With a social bond the Government contracts out some social services work with set timelines and agreed performance targets attached to those services.
A non-government organisation will then provide the services.
It does so though using money put up by investors.
The mechanism by which investors provide this money is through buying the social bonds that are issued.
Investors could range from banks through to private individuals.
If the agreed performance targets for the services are met, the Government will then pay back the investors their principal on the bond, and a percentage return.
…as Chris Trotter pointed out just before the budget…
The “Better Public Services Programme” that Bill English launches on Thursday (almost certainly under a new and catchier name) won’t be about relinquishing all state responsibility for the poor, the sick and the young, it will be about funding private entities to provide services which, hitherto, had been provided by public servants.
In English’s own words to the Institute of Public Administration on 19 February 2015: “Testing for spending effectiveness will be core to this process. If we can’t measure effectiveness, it won’t be funded through social investment. We’ll be systematically reprioritising funding to providers that get results.”
To anyone who’s been following the commissioning of the new privately-run prison at Wiri, south of Auckland, all this talk of “social investment” and “providers” will sound very familiar. The taxpayers have spent millions on the construction of the Wiri facility, and the Government has just announced the laying-off of close to 200 prison officers from around the country in order to supply it with a core of highly-trained staff, but the actual running of the prison has been contracted-out to the multinational firm, Serco. For the next quarter-of-a-century a private entity will be permitted to extract a substantial profit for the provision of a “service” that the state (minus the profit) has, quite rightly, accepted responsibility for the past 200 years.
…this privatisation of social services by stealth was of course completely missed by every mainstream media publication who instead chose to focus on the $25 extra smokescreen for beneficiaries so that the real agenda of privatising our social services never made it to the front page.
The budget coverage was just another example of how easy it is to lead the mainstream media.
The real agenda, beyond the $25 which actually amounts to maybe $18 when the other cuts into benefits is factored in, is to privatise the social services of NZ.
We see it in private prisons, we see it in state housing, we see it in forcing sickness beneficiaries back to work, we see it in forcing solo parents back to work, we are seeing it in charter schools and we will now see it in mental health. This wholesale abdication of state obligations to the private sector should have every NZer on their feet screaming, but because middle class tax privileges like working for families and interest free student loans are coupled with property speculation, the pain and damage is being felt by those who are voiceless and powerless on the bottom of the heap.
The 3rd term of a National Government is to slowly chip away at the social services of Government and hand them over to National’s corporate mates. This will be aimed at the most vulnerable in society who have no ability and no political vehicle to fight back with.
And people wonder why the budget protest outside SkyCity was so angry.
I was shocked when I heard about this in the news at the weekend. I think what shocks the most is that they’re starting with those afflicted with mental health problems. If you’re already feeling suicidal, well… need I say more.
Everyone involved in this horrible scheme will be under pressure to produce results, all in the name of making a profit for the investors.
This is just another step into the direction of dismantling the welfare state or social security system as we have known it. It is yet more measures as part of the agenda of privatisation by stealth, nothing else. “Social Bonds” have only been tried in few places overseas, and there is little or no info of any such experiments having been successful.
The way Jonathan Coleman responded to answers by Jan Logie (Greens) and Annette King (Labour) in Parliament today, it is all supposed to be some great, smart idea, to attract investors, who are willing to take a risk, and pay for such bonds, that will be used to pay providers to deliver services. A trial is going to be run to try and “support” mentally ill into work.
Coleman says, if the providers do not deliver, they will not get punished, but the investor will miss out on returns. I believe it when I see it, as Annette King claimed the anticipated function appears to defeat the purpose.
But they have been doing something very questionable already, on trials, for a while now. This was reported in the media about 2 years ago:
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10893823
These services have been operating a while, but there is damned little transparency and information that has been made available about how they work and what achievements were made by taking this radical, outsourcing and privatisation approach.
There was an attempt to get OIA info from MSD on these trials, but they provided damned little information, about the supposed “success”, so one must conclude existing trials are a failure:
http://accforum.org/forums/index.php?/topic/17163-mental-health-employment-service-sole-parent-employment-service-oia-info-implies-msd-trials-a-failure/
Read this OIA response from MSD, perhaps (especially also questions/answers 5 + 10), it reveals some interesting info, but keeps other data undisclosed:
https://nzsocialjusticeblog2013.files.wordpress.com/2015/04/msd-oia-rqst-mhes-waa-other-support-services-issues-reply-anon-26-02-2015.pdf
And all this talk about “health benefits of work”, this is a debatable claim, often work, at least the kind of jobs we now have, is not that healthy at all (e.g. precarious, insecure, low paid work):
http://accforum.org/forums/index.php?/topic/16737-work-has-fewer-%e2%80%9chealth-benefits%e2%80%9d-than-mansel-aylward-and-other-so-called-experts-claim-it-can-cause-serious-harm/
WINZ have also started this, sending people not just to their known “designated doctors” for re-assessments, but to new “work ability assessors” in the private market:
http://accforum.org/forums/index.php?/topic/16092-work-ability-assessments-done-for-work-and-income-%E2%80%93-partly-following-acc%E2%80%99s-approach-a-revealing-fact-study/
It is clear what this is all about, when we hear Bill English and others talk in ways that betray the ideology behind it, and this it is, massive ideology, poor evidence, and all just designed to achieve cost savings, before anything else:
http://accforum.org/forums/index.php?/topic/16685-bill-english-takes-lessons-from-work-will-set-you-free-propagandists/
And where is that extra “support”, apart from extra, more intensive “case management”? There is NO extra health spending on mentally ill, as they cut and capped this all over the show. There is less health spend per capita after this budget. Tell me where, if you know about more spending, please.
It will be just another experiment, with the weakest and most desperate in society, with high risks, but they do not really care, when it comes to executing cold, actuarial plans.
Mike
That is an excellent and helpful compilation. What a dreadful backward step in the name of a failed ideology. There needs to be a lot more light shed on the stand-over tactics being used by contracted services to ensure a person stays long enough in work so the contractor gets paid.
Social bonds will have many perverse and unintended consequences. Thanks Martyn for the blog. This is serious stuff AND SO UNDER THE RADAR.
The people who usually get hurt are those who innocently expect ‘the system’ to look after them because they’ve paid their taxes and been Good People…
Some continue through the brutalisation process and become anxious conformists.
Some learn how to work ‘the system’ and receive their legal entitlements.
And others quietly edge into the grey economies where the shrunken forces of the IRD, WINZ, and our Wonderful Health Providers rarely go.
Which is why Mr English is lamenting his ever-reducing tax tax.
Neither helpless nor voiceless. Stay away from the barricades and don’t rark up the Cossacks. There’s no appetite for change in the respectable economy – yet. It’s too risky to upset the ticket-clippers. Wait – and live the best you can while you do.
Completely missed or purposefully missed?
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