How Did We Come to This?

How did we come to this? When did New Zealanders become convinced that the care of the most vulnerable in our society, and particularly of those suffering mental illness and disability, should be treated as an opportunity to make a profit rather than as a community responsibility?

Nothing more clearly demonstrates the mindset of the government we re-elected just a few months ago than this stark assertion that it is the quest for money that alone motivates us. We now know beyond doubt that our government is convinced that the only way to persuade people to care for others is to encourage them to make money from other people’s desperation.

There will, of course, be those who will respond immediately with the argument that – distasteful though it may be – it is simply a recognition of what really drives people, and that we should welcome anything that produce better outcomes, however they are motivated.

Those of us who still retain a belief in the inherent attachment of New Zealanders to this country’s traditional values will reject that argument. But even if we were to overlook the moral bankruptcy of such a contention, we would still be entitled to show that the basic premise that we will thereby get better provision has no foundation.

We are by now familiar with the consequences, in many areas of our public life, of entrusting important interests to the tender mercies of those whose sole interest is the search for profit. Is Sky City concerned about the damage to problem gamblers from more pokies and gaming tables? Is Petrobras worried about the impact on our marine environment of deep-sea drilling off our coast? Was Pike River alert to the need to look after the safety of their miners?

We know from experience that the first concerns to fly out the window when the profit motive is at stake are the well-being of others, service to the community, and the conservation of scarce resources.

That lack of interest, let alone concern, for wider community values becomes more marked, the further removed the profit-seekers are from the impact on the ground of their actions for other people. If the extent of the investor’s involvement is that he or she puts in some money and then waits for the regular and promised payments, but never has the need or even opportunity to see what activity in practice actually generates those payments, it is simply unrealistic to believe that there will be much interest in whether or not a particular service is properly delivered.

The only concern will be as to whether the conditions that are specified in order for the payment to be made have been met. And it is here that the government’s experimental model really breaks down.

The government’s case for taking this action, after all, depends on their claim that the current models, involving either their own staff in the Ministries of Social Development and Health or the purchase of services from approved voluntary bodies, does not adequately guarantee that the required services are fully delivered.

That is presumably because the government has trouble in accessing sufficiently reliable information as to the level at which those services are provided. They have presumably discovered that a comforting report that certain goals have been achieved does not always accord with the facts.

Yet, if that is the case, it is hard to see how removing the government even further from the action, and interposing a range of private investors with literally no interest other than their regular payments in the quality of those services, can be expected to improve matters.

If the public servants and voluntary bodies that are directly involved cannot be trusted to provide reliable information about the services that are provided, what makes ministers think that a certificate provided to authorise payment of interest on a bond to a virtually anonymous investor will be any more reliable?

If the government is so suspicious of the reports it receives about the quality of services being delivered, it is hard to see that changing the method of funding those services can address the problem. Indeed, it is likely to become worse, since the pressure will be on from investors to ensure that, whatever the level of service actually provided, the reports will show that the required outcomes have been met.

And if there is a real issue here, and there are proper safeguards to ensure that stipulated outcomes are in fact achieved, so that the regular payments are not always guaranteed, what makes the government think that investors would tolerate that uncertainty and would buy the bonds anyway?

The case for this experiment in other words has nothing to do with better services or even just better value for money. It has the great advantage that it gets another tranche of public spending off the government’s books and helps to reduce the deficit. And it rests on a visceral conviction – or, if you prefer, a gut feeling – that making a profit, whatever the context and the wider outcome, should always be supported and is always worthwhile. It has, the government seems to be saying, an intrinsic value all of its own, and trumps all other considerations.

Bryan Gould

2 June 2015.