Appendix 4: Costing Domestic Violence in New Zealand: a Contribution to Policy Solutions?

Address by Judy Lawrence, Chief Executive, Ministry of Women's Affairs, as part of a panel on "The Role of Men and Boys in Ending Gender-based Violence"

June 6 2000

It is a privilege to be asked to contribute to this prestigious panel today, and I would like to compliment the three agencies for their collaboration on the issue of the role of men and boys in ending gender-based violence.

My presentation is somewhat different from those you have heard so far. Mine is a government perspective on the role that costing information can play in shifting the commitment and action that comes from two parties: a government, and a service agency providing services for those who have been subjected to domestic violence.

I will ask whether information on the costs of domestic violence can make a difference in shifting the policy response of a government.

First I'll give a little background on the policy context of domestic violence in New Zealand, and I'll then go on to describe the three costing studies that have been used in the policy debate.

The New Zealand Government has recognised domestic violence since the early 1980s. At that stage it introduced funding for family violence programmes and set up a funding formula for Women's Refuges. The formula was based on one-third government funding, one-third community funding and one-third private sponsorship.

In addition, the Government has established a crime prevention strategy to reduce the incidence of family violence.

In 1993, the Family Violence Unit of the Department of Social Welfare commissioned a report on the economic costs of family violence. This was to provide costing information for a policy debate that was taking place and which ended up with the passage of the Domestic Violence Act 1995. This legislation provides a framework of legal protections from domestic violence and processes for mediation and family counselling.

The results of the costing work, I contend, had a profound effect on the nature of the policy debate. They showed the urgency of having an effective legislative response to the enormity of the issue for many women. Moral suasion has never been enough in debates for funding or for legislation to protect women from domestic violence. Our Treasury, like those in most countries, wants economic reasons for actions which have fiscal implications, so we set out to provide those compelling arguments.

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The NZ Economic Costs of Domestic Violence (1994)

This report, carried out by Suzanne Snively of Coopers and Lybrand (now PricewaterhouseCoopers) provided a platform from which to refine our understanding of the economic costs and consequences of family violence.

The annual cost of domestic violence in New Zealand was estimated to be at least NZ$ 1.2 billion, which is about 2% of New Zealand's Gross Domestic Product. This is more than our wool export receipts, and as much as we paid in unemployment benefits in that year.

The data was compiled using an Australian methodology adapted to suit New Zealand conditions. Data were collected from a range of government and non-government organisations. A spreadsheet format was developed so that in future additional data could be added and assumptions changed. This increased the usefulness of the study for policy and research purposes.

The framework achieves the objective of illustrating the magnitude of the economic costs of family violence to both the individual and the Government. The provision of various scenarios enables the comparison of costings based on different sets of assumptions about the effects of family violence. The NZ$1.2 billion estimate is based on very conservative assumptions. More realistic assumptions lead to an estimate of NZ$5.4 billion.

By providing a portable framework, future analysis can continuously improve understanding of the costs of family violence. As more data become available, they can be incorporated into the framework.

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The Economic Cost of Refuge Services (1996)

This second costing study, was commissioned by the National Collective of Independent Women's Refuges. It sought to measure the true costs of its services and to apply these to likely future forecasts.

The study provided a benchmark from which to monitor and forecast economic costs against budget and funding sources and to analyse budgets against future outcomes.

The results showed that the government funding had fallen below one-third of the total costs of providing the services, if the costs of the unpaid volunteers were accounted for. Or, put another way, the direct return per dollar of government investment was estimated to be 250%.

This became part of the information provided through the budget policy process when the Government's contribution to funding Refuge services was being debated. It became critical in the Government's response later on.

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Improving Outcomes for Women and Children Using Refuge Services (2000)

This third study, also commissioned by Women's Refuge, sought to determine how to improve the outcomes for women and children exposed to violence, by examining the services currently delivered by Women's Refuge. The basis for the analysis was understanding what combinations of services assist women and their children to become free from violence.

The approach describes the relationship between inputs (funding, Refuge staff and other resources), outputs (hours of service delivery by service type), and outcomes (women and children safe, living free from violence).

The results of the study show that the government funding currently covers less than a fifth of the true costs of services in each year. True costs refer to the actual expenses incurred plus the imputed costs of unpaid work and in-kind services.

The cost estimates show that by increasing the spending on an average case from NZ$20,500 to NZ$25,000 over a ten-year period, there is a much increased likelihood of women and children becoming free from violence. For example, increasing access to quality counselling and education programmes could more than double the proportion of those women who first access Refuge achieving their full potential.

To put this amount of money into perspective, NZ$25,000 represents half of what is spent in one year per person in prison.

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What this study shows is that with current levels of service provision, it is estimated that 8,000 women will be free from violence 20 years from now; with increases in the level of service, 20,000 women could be violence-free 20 years from now. A doubling of government funding could achieve this.

Not only would more women be free from violence, with all the individual benefits of this. There would be a reduction in costs to society as well as the addition of the lost opportunity costs associated with the effects of domestic violence on women's full participation in society. This would result in a triple benefit, with wide fiscal benefits to the economy. Pretty compelling stuff, really, and hugely persuasive in the policy debates that my Ministry and others contribute to.

To date, the Government has responded with increased ongoing funding of:

$1.125m for family violence prevention services, including Women's Refuge services

$1.9m for crime prevention programmes, including:

personal safety training for girls

Māori family violence prevention services

specialist services for child victims and witnesses of family violence

extension of family violence services in rural areas

community-based sex offender programmes.

It has also confirmed the existing money to Women's Refuges, $4.637m.

I can only encourage all countries to undertake such studies on the costs of family violence. They are a very powerful and persuasive tool to add to the policy debate. Decision-makers need to know the implications of the costs of violence to the economy. These costs affect the growth of communities and their contribution to the economy and to society. Costs to women are costs to the whole of society in the widest sense.

I thank you for enabling this contribution to be made to the discussion today.

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