Report: Child abuse and neglect cost NZ $2 billion

August 25, 2009

Every Child Counts has just released a report written by Infometrics entitled The nature of economic costs of child abuse and neglect in New Zealand.

The New Zealand Government has substantially increased its investment into the prevention of child abuse and neglect in recent years.  In the 2004 Budget departmental appropriations for education and preventative services for children amounted to just $16.1m, or 3% of the Child, Youth and Family appropriation in 2004/05.  In the 2008 Budget this commitment had risen to $166m. 

However, adapting international cost estimates to the New Zealand situation suggests that every year child abuse and neglect generates a long term bill that is equivalent to around $NZ2bn (or over 1% of GDP).

Based on US studies, just 32% of this cost is likely to be the direct consequences of child abuse and neglect (eg health care, child welfare service, and justice system costs).  A further 36% of costs relate to ongoing health, education, and criminal consequences for child abuse victims in later life.  The final 32% of costs result from a decline in productivity as victims fail to meet their potential (Wang and Holton 2007).

The growing focus on prevention is a welcome development that reflects the current understanding of child development and the biological underpinning of this development process:

• The architecture of the brain and the process of skill formation are both influenced by an inextricable interaction between genetics and individual experience.
• Both the mastery of skills that are essential for economic success and the development of their underlying neural pathways follow hierarchical rules in a bottom-up sequence such that later attainment build on foundations that are laid down earlier.
• Cognitive, linguistic, social, and emotional competencies are interdependent, all are shaped powerfully by the experiences of the developing child, and all contribute to success in the work place
• Although adaptation continues throughout life, human abilities are formed in a predictable sequence of sensitive periods, during which the development of specific neural circuits and the behaviours they mediate are more plastic and, therefore, optimally receptive to environmental influences.

Brain development is continuous over many years.  For children at unusually high risk, neuroscience provides a compelling argument for beginning intervention programmes at birth, if not prenatally.  Developmental research shows that children master different skills at different ages, which suggests that opportunities for a variety of effective interventions are present throughout early childhood.

Looking forward the critical issues that still need to be resolved are:

• Is the current level of government spending on preventing child abuse and neglect sufficient?
• How can one ensure that the appropriate level of resourcing is attained and maintained?
• What institutional arrangements will encourage the delivery of effective preventative services?

Answering the first question will require further New Zealand specific research, and this will also contribute to debate about the level of public commitment to the issue.  Grunewald and Rolnick (2006) suggest an elegant approach to ensuring public commitment is maintained and which can foster innovation in the delivery of services aimed at reducing the incidence to child maltreatment: the creation of a public endowment.  Grunewald and Rolnick consider the benefits of such an approach are that:

• It encourages private, innovative, and targeted provision of early childhood services (small scale, high quality interventions have demonstrated greater social returns than broad-based publicly provided schemes).
• It represents a permanent commitment and allows leverage of resources from public and private stakeholders.
• A permanent commitment sends a market signal to service providers that they can expect a consistent demand for their product.
• By drawing up a business plan that demonstrates it can win service provision contracts, a prospective provider can leverage funds for capital expansions as lenders will be assured by the stability of the early childhood development endowment.

This report covers the consequences of child abuse and neglect,  the case for preventative intervention, and policy issues related to the promotion of a preventative approach to child abuse and neglect.

Download The nature of economic costs of child abuse in New Zealand.