The Government announcement that it plans to develop Social Impact Bonds is yet another indication that the Bill English – led reform of the social sector is both more radical than many might have expected and also gathering pace.

The bonds which will be sold to private investors will have their return partially determined by whether or not agreed social targets have been achieved.

Mr English said in a statement that they would l 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.”

 “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 said.

The bonds were first introduced in the United Kingdom and have already been piloted here by the Ministry .of Health with a programme which began at the beginning of last year.

That programme is now at the point of trying to match service providers (who will receive the money from the bonds) and intermediaries who could provide the investment.

The New Zealand Initiative has recently published a paper advocating their use and the whole concept is fast attracting attention in a number of countries.


It fits exactly into the Government’s social investment approach to the social sector because it focuses on results and opens provision of social services up beyond Government agencies.

Early indications from Mr English and Health Minister Jonathan Coleman are that the bonds may focus on mental health services and possibly post-release services for prison inmates.