GUEST BLOG: Damon Rusden – People are not commodities



Recently it’s been declared that the national government plans to issue social bonds for the provision of some mental health services. This follows the proposed sale of 20% of state houses and the sale of 49% of three key state assets.

Let me start with the social bonds. Social bonds are a form of I.O.U which requires certain criteria to be met before receiving payment. In this case it will be non-government agencies forcing mentally disabled people into work, with goals and timelines established.
I have always held the belief that necessary sectors should never be handed over to private investors for profit – our Government is viewing people with mental disabilities as a burden. The lack of regulation in addition to financial incentive does not result in a positive outcome for some of our most vulnerable.

The sale of Housing New Zealand properties is forcing those who need housing the most into market rentals which have historically been at the whim of the market and landlord. Social housing is a necessary step to shelter those who have limited means to find something better. It is temporary, and National is taking this opportunity away. It also robs NZ of any regulation – home owners don’t need to comply with the minimum standards for housing the Government does, and is free of any future obligation, such as the growing demand for insulation. National planned to prioritize the sale to NGOs, “churches, iwi and non-government organisations” Such as the Salvation Army. The same very same groups who would certainly discriminate, and have done so. Yet the main recipient, the Salvation Army, does not want the transfer. they claimed HNZ was “making a mess”. So who does National turn to for help? property developers. The business sector Key promised would not have much purchasing power. As the Labour Party has said, it is effectively a $2 billion dollar sell off as a subsidy to speculators, developers, investors and landlords. I can’t possibly imagine why flogging off thousands of houses to private hands is a good policy, especially considering Key’s promise to manage and eliminate child poverty. Over 50% of children in poverty live in a state home. This is ideological, in the sense it runs in the same vein of neoliberalism- it eases the burden from the government to do the one job it has, to look after those who choose to live in NZ.

The partial assets sale was a controversy – one third of voters did not want it. Yet it continued under the guise of “mum and dad investors” and was seen as accessible to the average kiwi – yes, it seems the average kiwi had $1000 to invest. But as the Green Party later discovered, 26% of shares from Mighty River alone went to overseas investors. Despite the obvious flaw in any investing initiative that takes away long-term revenue, at least quick-buck style of economics the National Party champions is consistent.


Damon Rusden is a chef, journalist and law student with an avid belief in civic education and accountability.


  1. “Capitalism would, in the end, Marx said, turn on the so-called free market, along with the values and traditions it claims to defend. It would in its final stages pillage the systems and structures that made capitalism possible . . . . Government expenditure accounts for 41 percent of GDP. Corporate capitalists intend to seize this money, hence the privatization of . . . prisons, schools and our disastrous for-profit health care service. None of these seizures of basic services make them more efficient or reduce costs. That is not the point. It is about feeding off the carcass of the state. And it ensures the disintegration of the structures that sustain capitalism itself.

  2. Oliver Hartwich is Executive Director of the so-called New Zealand Initiative – a Neo Liberal buisness think tank which seems to be responsible for selling Key on the notion of Social Impact bonds (SIBs).

    Bonds of the type the Nats wish to employ, so as to flog-off mentally ill populations… for profit. Lets do our homework (lots of online arguments against and information about ) on SIBs and send Mr. Hartwich an email expressing our informed displeasure

    You might also want to write to the Minister of Health or copy him in on your letter to Hartwich.

    Jonathan Coleman

    Goldman Sachs and Bloomberg partnered to pioneer SIBs in the US – so that should tell you most of what you should know about the advisability of the scheme.

    SIBs are a relatively untested mechanism for the delivery of social services – and where there has been limited testing, the methodology of testing (self-selected groups and no control group) is questionable. As far as I can find SIBs haven’t been employed in mental health delivery – they’ve mostly been field tested for anti-recidivism programs in penal environments … with mixed results.

    Like trickle down economics, SIBs are a Neo Lib notion that begins with an ideological love affair with an idea and then a social experiment that either disregards proofs or manufactures proofs to support an ideological thesis.

  3. Correct me if I’m wrong, but I believe the bonds is a system Key used when he was working for Merrill Lynch. Now Key is trying to apply it in New Zealand. And what’s the possibilities Key has got the suchlikes of Merrill Lynch in on it?

  4. Two thirds of voters in the referendum did not want even partial asset sales. The referendum was a complete farce and everyone knew that if the results went against National it would be ignored or spun into a National victory. The referendum was really just a tax payer funded popularity poll for National.
    But it didn’t dissuade the sleepy hobbits from dutifully ticking the National box the following year.
    Either NZ voters are completely disconnected from reality, or they just don’t give a monkeys.

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