$100 million Commonwealth Outcomes Fund and Social Enterprise Development Initiative – critical steps to growing impact investment

$100 million Commonwealth Outcomes Fund and Social Enterprise Development Initiative – critical steps to growing impact investment

Impact Investing Australia (IIA), the nation’s peak body for impact investment, welcomes the Federal Budget initiatives to address entrenched social disadvantage through impact investment, including $100 million for a Commonwealth Outcomes Fund, an $11.6 million Social Enterprise Development Initiative, and a $210 million expansion over four years to expand the Emerging Markets Impact Investment Fund (EMIIF).

IIA also welcomes the Government’s commitment to exploring via the Investor Roundtable how private capital can further boost impact investment, including through institutional investors providing wholesale capital and support for new and emerging for-purpose organisations.

The Outcomes Fund will make payments to service delivery organisations according to the measurable outcomes they achieve, while enabling them to attract additional private capital to tackle entrenched disadvantage. The Fund will enter into outcomes-based contracts, with non-profits and social enterprises who have a deep understanding of local disadvantage and proven track records in addressing it.

This announcement of the Outcomes Fund follows a recommendation from the Government’s Social Impact Investing Taskforce which comprised five members of IIA’s current Board. The Taskforce was commissioned to develop a strategy for a Commonwealth role in the impact investing market, submitting its final report to the Morrison Government in late 2020 and updating its recommendations for the Albanese Government in December 2022.

IIA has long advocated for this type of outcomes fund in Australia, and for the expansion of impact investment funding in Asia Pacific. It says these are just some initiatives that will enable government, industry and philanthropic partners to build a self-sustaining impact investing market that will improve lives, including the 3.3 million Australians currently living below the poverty line.1

“Momentum around impact investing has been growing in Australia, however we have not reached a point where it is at a scale required to bring significant social impact. Tonight’s Budget announcement of the Outcomes Fund and commitment to further efforts consistent with our core recommendations to unlock private capital is a good start to achieving this,” Social Impact Investing Taskforce Chair and IIA Board member, Michael Traill AM said.

“With targeted support from the Government, in partnership with states and territories and the private and social purpose sectors, we can unlock the capital and resources required to address the widespread economic and social vulnerability facing millions of Australians.”

Commonwealth Outcomes Fund


• Efficient use of taxpayer funds (by paying for programs that have achieved certain measures)

• Improve outcomes (through rigorous measurement)

• Leverage state and territory funding that addresses complex (cross-portfolio intergovernmental) social issues


• Fund outcomes-based programs (in partnership with states and territories)

• Measure the full outcomes of programs to inform broader government policy

Key partners:

• States and territories, service delivery organisations


1. Create more investible opportunities, significantly increasing the number and size of social investment opportunities (many complex social challenges are suited to outcomes-based payment initiatives, such as out-of-home care, homelessness, health, unemployment and recidivism).

2. Help address complex social issues that are (generally) the responsibility of State and Territory Governments and provide benefits to the Commonwealth, such as reduced income support payments or improved employment outcomes.

The $11.6 million Social Enterprise Development Initiative will help social enterprises to access capital and scale through capacity-building grants and online mentoring and education. This builds on the critical early work of the Commonwealth’s Social Impact Investment Sector Readiness Fund.

IIA also welcomes the Budget measures of:

$210 million expansion over four years to expand the Emerging Markets Impact Investment Fund (EMIIF) from $40 million to $250 million (to provide financing for small and medium enterprises operating in the Indo-Pacific and support the mobilisation of private and multilateral finance for development outcomes)

$8.3 million over four years (and $1.3 million per year ongoing) to establish a sovereign green bond program to raise capital for environmental and climate change related programs

$1.6 million (in 2023–24) to support the initial development of a sustainable finance taxonomy for classifying economic activities according to their impact on sustainability goals

IIA says these announcements are part of a range of initiatives that offers Government a way to build an inclusive economy, use public resources more efficiently and alleviate the drain on the public purse. As mentioned in the Social Impact Investing Taskforce Interim Report and previous IIA budget submissions, other impact investing initiatives that would help Australia to achieve this include:

A foundation to support early-stage social enterprises, providing flexible loans and funding (such as grants) for capacity building activities, enabling social enterprises to prepare to raise capital and become investment or contract ready, resulting in a scaling of their impact.

An impact investing wholesaler that would see the Government partner with private investors to provide wholesale capital to intermediary funds (creating investment opportunities that meet the financial and impact requirements of investors and unlock private capital to help address social and environmental issues).

A central policy unit within Government, operating as an independent statutory authority, to drive impact investing policy and monitor and assess the success of Government impact investing initiatives.

The purpose of impact investing is to bring together the best of the business, financial, government, philanthropic and community sectors to solve entrenched social disadvantage. Impact investing generates financial returns alongside measurable social and environmental outcomes, in areas such as employment; social and affordable housing; disability support; mental health; aged care; early childhood education; Indigenous disadvantage; and renewable energy and agriculture.

“The need to for impact investing is more urgent than ever, given the rising cost of living pressures and the economic dislocation and disproportionate impact on vulnerable Australians,” Impact Investing Australia Chair, Richard Brandweiner said.

“We look forward to working with the Government on the implementation of the Outcomes Fund and Social Enterprise Development Initiative, and continuing the dialogue with Government through the Investor Roundtable to catalyse the investment of private capital towards solving entrenched social disadvantage. Applying market-based disciplines is necessary to help unlock private sector capital and drive better social and environmental outcomes overall.”


1 Davidson, P; Bradbury, B; and Wong, M (2022) Poverty in Australia 2022: A Snapshot Australian Council of Social Service (ACOSS) and UNSW Sydney