Budget 2015: Social bond to focus on mental healthHealth Finance Budget 2015
New Zealand’s first social bond will aim to empower people with mental illness and support their families, Finance Minister Bill English and Health Minister Jonathan Coleman say.
Social bonds, in which the return for investors will be partially determined by whether or not agreed social targets have been achieved, will become another tool in the Government’s social investment approach that is aiming to improve the lives and prospects of the most vulnerable New Zealanders.
“The Government is focused on achieving better results for individuals and families in highest need,” Finance Minister Bill English says.
“Where we succeed, there are opportunities to help people fulfil their potential, a chance to break inter-generational cycles of dependency and, in the long term, potential savings for taxpayers.
“So social bonds are a consistent fit with our wider social investment approach which aims to better understand both the drivers and risks of social dysfunction and where we can have the greatest impact in improving people’s lives.”
Dr Coleman says social bonds are an innovative way for the Government to contract social outcomes. They will see private and public sector organisations operating together to fund and deliver services.
If they achieve agreed results, the Government will pay back the investors plus a return. The return depends on the level of results, up to an agreed amount.
Budget 2015 set aside $28.8 million for four social bond programmes and the first will expand on a small and successful pilot delivering employment services to people with mental health conditions.
“We know the importance of making mental health services accessible and relevant,” Dr Coleman says.
“For some people, being supported and encouraged to achieve employment is an important part of their treatment and ongoing care.
“In addition, this social bond will support the Better Public Service (BPS) target of significantly reducing long term benefit dependency by 2017.”
The Government’s social investment approach is having an effect and the most recent actuarial analysis of the benefit system shows the expected costs of supporting current beneficiaries over their lifetime has fallen by $7.5 billion, Mr English says.
“This is mostly due to more sole parents moving in to work. As a result, there are also 42,000 fewer children living in benefit-dependent households now than there were three years ago.
“This is encouraging but there is a lot of work to do to embed the focus on results, rather than simply counting the money the Government spends,” Mr English says.
“The Budget announced measures to relieve hardship in New Zealand’s lowest-income families but identifying and changing long-term drivers of hardship remains our focus. If social bonds can help do that, we’re willing to try them.”
Details of how the mental health social bond will be structured and which organisations will be involved are still to be agreed by Cabinet.
The next social bond will focus on either lowering re-offending rates, or helping people manage long-term health conditions.
Further information about social bonds can be found at www.health.govt.nz.