Annette King attacks social bonds

Annette King is attacking the government's intention of using social bonds to improve social and health outcomes. NewstalkZB reports,

Government plans to issue social service bonds have come under fire from Labour's health spokesperson.
The state wants to contract out work and put in place measurable performance outcomes.
Contractors would fund that work by selling bonds to investors - if performance outcomes are met, the Government would pay back the bonds plus a percentage return.
Annette King said the Department of Internal Affairs has warned against the idea.
"Their own officials said there are very real difficulties in assessing what projects have potential to deliver net benefits for the government, and even greater difficulty in evaluating if they've been successful."
She asked why the Government would pay a profit to private investors, for the provision of core public services paid for by the taxpayer.

Here is a succinct explanation of what a social bond is. It comes from the UK where they are already used:
 

              A SIB is a financial mechanism in which investors pay for a set of interventions to improve a social outcome that is of social and/or financial interest to a government commissioner.

If the social outcome improves, the government commissioner repays the investors for their initial investment plus a return for the financial risks they took. If the social outcomes are not achieved, the investors stand to lose their investment.

The answer to Annette's question is because the private investor,  who is far better placed to assess risk  than the taxpayer, bears any loss.

If an intervention is so risky a private investor can't be persuaded it will achieve desired outcomes, why should the taxpayer fund it?

Social Impact Bonds

A SIB is a financial mechanism in which investors pay for a set of interventions to improve a social outcome that is of social and/or financial interest to a government commissioner.

If the social outcome improves, the government commissioner repays the investors for their initial investment plus a return for the financial risks they took. If the social outcomes are not achieved, the investors stand to lose their investment.
- See more at: http://www.socialfinance.org.uk/services/social-impact-bonds/#sthash.sukNL6NV.dpuf