Bruce Bisset: Poor get new profit-driven masters

Welfare will no longer be a social good, but a profit-driven incentivised business, writes Bruce Bisset. Photo / Sarah Ivey

The sheer audacity of the neoliberal agenda and the depths of deception it is willing to plumb in order to ensure the rich get fatter while the poor get forgotten is staggering.

A Saudi princeling bribed - the real word for "facilitation payment" - with an $11 million sheep farm in order to sweeten the prospects for a free trade deal may be repugnant, but about what one would expect from a government without morals.

However, turning the fate of the downtrodden, the defective and the abject of society over to corporate money-men to profit further from their plight by making "care" a tradeable commodity is simply beneath contempt.

Yet that is precisely what National has embarked on doing. In the process, they will flip the last vestiges of our formerly-outstanding welfare state on its head: welfare henceforward will no longer be a social good, but a profit-driven incentivised business.

Yep, you read that right. The latest experiment to crawl out of the neolib's toy box - so new it has yet to produce any data to say whether it works at all, let alone as well as hyped - is called a social impact bond, and it is about to transform social services.

Here's the theory: government contracts major social service roles - care for the mentally ill, say, or rehabilitative programmes for criminals - to business "providers". Those providers agree a series of performance targets which their programmes must meet.

The providers then attract investors - supposedly only "reputable" ones, according to Health Minister Jonathan Coleman, though anyone with ready cash will surely have opportunity - to back their programmes by buying "social impact bonds".

These work in much the same way as any other bond in the market, in that if the targets for "care" are met, government (via the provider) repays the investors and also pays a dividend. How much may well depend on the perceived market value of a given bond.

So if the sector in question "performs" in accordance with the agreed business model, the rich get richer on the backs of the disadvantaged they are "managing". Literal corporate welfare.

What's wrong with this idea?

First, there's no proof of concept. Of the half-dozen countries running experimental models, only a UK prison scheme designed to reduce recidivist offending has yet produced any results - and those interim ones, which failed to meet the targets. Moreover that was using already-motivated inmates, not run-of-the-mill prisoners.

Second, it's easy to skew the results. If, as hinted, the first scheme here aims to get mentally ill beneficiaries into the workforce, it may be impossible to know who has taken advantage of whom, or how, in any outcome. It's not as if that group aren't easy prey to manipulation.

Third, a scheme adjudged to deliver its targets will cost taxpayers more to repay the bonds, plus profit, than if the Government had run the scheme itself. The argument that the "extra benefits" derived for society overall will outweigh this cost is completely subjective.

But the most important objection comes from asking, Why do this at all? For surely dispensing with the obligation to care for all citizens is an abrogation of the central pillar of governance.

The answer is obvious: money. Along with charter schools and the corporatisation of state housing, it's another way to limit the need to tax the wealthy - because the state, as an indirect funder, needs less direct taxation - while also opening up new areas of investment.

So the poor get new profit-driven masters who can dine on their poverty. Oh brave new world order.

That's the right of it.

Bruce Bisset is a freelance writer and poet