Billion-dollar cost burdens society

By Andrew Stone

Violence is a billion-dollar business in New Zealand.

The figure is conservative. The real cost - in human misery, shattered families, psychological damage and financial ruin - runs much higher.

Economist Suzanne Snively believes the annual cost of family violence could be a staggering $10 billion if lost income is calculated.

She led a Coopers & Lybrand study into family violence, which arrived at a minimum cost of $1.2 billion. Her team, building on a similar exercise in New South Wales, assumed that one in seven families experienced violence, a rate accepted by police, justice, health and welfare groups.

Drawing on official statistics, Suzanne Snively and her team of domestic abuse experts calculated that nearly 300,000 women and children were "survivors" of family violence.

In line with other researchers, she concluded that the incidence of violence was seriously underestimated.

Her report agreed with the NSW standard, which found that for every woman who called police there were five women who turned elsewhere, to friends, a refuge or the family doctor.

Researchers say many women refuse to admit to violence in a relationship, a response that makes it difficult to get a grip on the extent of the problem.

The report was issued in December 1994 with an undertaking that Social Welfare's family violence unit would update the figures. The work hasn't been done.

"I think that's mistaken," says Suzanne Snively. "Unless we have a better understanding of the scale of violence in New Zealand then we cannot be sure what we might do to reduce the cycle of offending."

Brenda Pilott, who ran the family violence unit and commissioned the Snively report, said money had been diverted to other anti-violence initiatives.

"It would probably be useful to go back and update the numbers. But the report was immensely valuable in budging the Government to commit some serious funding to policies addressing family violence."

The Institute of Economic Research also had a stab at calculating the costs of crime. Its 1995 report for the Justice Department put the costs of violence at $1.1 billion - one-fifth of New Zealand's $5 billion crime bill.

Researcher John Yeabsley suggests the figure underestimates the real cost.

"We did a first cut of the material because we could not always get accurate assessments. But whichever way you look at it the cost is high."

The institute argued that further work could be valuable in fighting crime as it might reveal the best areas to apply resources.

"The point is to know whether your responses are right or not," Mr Yeabsley said. "Unless you get good quality data you have no way of knowing whether the policy is appropriate."

Driven by mounting public concern about violence, the University of Auckland's Injury Prevention Research Centre did its sums in a 1995 report.

The centre included suicide and attempted suicide in its estimates. Like the other studies, the centre came up with big numbers - the cost in 1992 to society of suicide, attempted suicide and homicide was $236 million.

The report noted that "it cannot be denied that the direct costs to society are substantial and as a result more emphasis must be placed upon prevention in order to reduce the financial and social damage to society resulting from such a needless waste of life."

The Government itself accepts that the cost of family violence lies between $1.18 billion and $5.3 billion.

The bill for violence in New Zealand includes many entries. Generally they fall into two accounts - costs to individuals or to the community.

Taxpayers pick up a big chunk of costs, through welfare, police, justice, courts, health and ACC services. Individuals - say, women fleeing from violent partners - tend to pay for medical services, counsellors, lawyers to represent them in disputes and accommodation.

The Snively study found that family incomes dived an average of 25 per cent after episodes of domestic violence, with an overall cost to individuals of $234 million a year.

Forced from family homes, victims of family violence spent large amounts on alternative accommodation. The report's accounting included childcare costs, legal and medical bills, and the Government's share of the account.

The lion's share was paid by Social Welfare, through several funding streams, with other contributions from the Children and Young Persons' Service, health, police, Corrections and Courts.

In summary, the Snively team put total costs at $1.2 billion - a figure it called "a realistic if conservative indicator of the true costs of family violence."

The number has been accepted by the Government and other researchers in the field, though Massey University economist Stuart Birks has challenged the report's conclusions. He believes a feminist agenda lies behind some violence research in New Zealand.

Brenda Pilott counters that: "We could have produced a report which used speculative data to get some shocking numbers. But we wanted a robust conclusion which we could stand behind."

Suzanne Snively, a PricewaterhouseCoopers partner whose mainstream credentials include two terms as a Reserve Bank director, has no reservations about arguing for a higher figure.

"We spend about $35 million a year keeping an eye on what inflation is doing. I think we accept inflation is not a trivial issue.

"People say, 'But the figures you quote can't be true'. Well, we've done the work and it stands up and it is true.

"I think personally it is closer to $10 billion, which is about what we get for our lamb and wool and dairy exports combined.

"But then we spend more on possum control than we put towards funding Women's Refuge services."