The Government completed its 100-day programme by announcing its promised inquiry into the abuse of young New Zealanders in state care.

It opted for a royal commission to undertake the task, though the instructions which will shape the commission's work remain unsettled. Consultation has opened on the terms of reference, but they are unlikely to stray far from the draft indications which provide an insight into what will - and what will not - be part of the commission's ambit.

The commission, chaired by former Governor-General Sir Anand Satyanand, is concerned primarily with institutions which had direct or indirect responsibility for an individual's care. This covers child welfare centres, borstals or psychiatric hospitals, and where services were contracted to other institutions.

The intention is to discover what physical, social and emotional abuse occurred in these settings, whether a heavier burden fell on Maori or Pacific people or those with disabilities or mental health issues, and to ensure it does not happen again.

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Schools, prisons and church-run schools are excluded from the inquiry, though the experience of individuals who passed through these places could be considered if they were in state care at the time.

The inquiry has been framed in a way which prevents the opening of a pandora's box of abuse claims. The Government will be aware of what has happened in Australia, where the cost of a broader investigation exceeds $600 million. Similarly an inquiry in Britain costs $40m a year.

No firm budget has been established for the New Zealand inquiry, though its first year is expected to cost $12m. The inquiry will not be awarding compensation, though it may well recommend that the government apologise for mistakes in the past which led to distress and suffering. The commission can however review existing compensation arrangements, and suggest improvements.

It is certain that pressure will mount to propose reforms in this area.

More than $15m has already been paid to claimants through the Confidential Listening and Assistance Service. This process, which heard the stories of more than 1100 people mistreated in state care, concluded three years ago, but has some way to run before claims are settled.

The historical nature of the inquiry means many of those whose lives are covered by its work will be in their 60s. Those responsible for any mistreatment will be in their 70s and 80s.

Royal commissions have an uneven history. The last one reviewed building failures caused by Canterbury earthquakes. It left some of those affected deeply upset because they expected it would hold to account those who designed the structures which collapsed.

The initial riding instructions for the Satyanand inquiry appear modest and cautious in their scope. This is a sensible approach to delivering on a political undertaking which could easily spiral out of control.

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