Government funding to address social and environmental challenges

Government funding to address social and environmental challenges

Impact Investing Australia (IIA) welcomes last night’s federal budget announcement to address Australia’s housing supply and affordability crisis, with a new national Housing Accord to bring governments, investors and industry together to deliver affordable homes. The Government’s aspirational target is to build one million new homes over five years (from 2024).

IIA says this could be the largest impact investment opportunity Australia has seen, with investors bringing private capital to support the work of the Housing Accord and help solve one of Australia’s greatest social challenges.

Australia’s peak body for impact investing also welcomes the investment of $20 billion to establish Rewiring the Nation to provide concessional loans and equity to invest in transmission infrastructure projects that will help strengthen, grow and transition Australia’s electricity grids.

IIA is hopeful that Rewiring the Nation will lead to opportunities for private investors to join the Government in delivering this initiative.

Chair of IIA, Richard Brandweiner applauded the budget funding for these important community and climate projects, that will help deliver positive social and environmental outcomes.

“At IIA, we have witnessed first-hand how support for affordable and social housing can be life-changing for vulnerable Australians, while also driving jobs creation and enabling social enterprises to scale their impact,” Mr Brandweiner said.

Over the past seven years of IIA’s Impact Investment Ready Growth Grants program (currently funded by the Department of Social Services), 11 housing projects supporting disadvantaged communities have received assistance with grants totalling $990,000, resulting in grantees expanding their social impact through successful capital raises of $125 million. In addition, IIA Growth Grants have supported important environmental projects that are helping to accelerate Australia’s transition towards a clean energy future.

In commenting on the budget’s support for social and environmental initiatives, Mr Brandweiner added IIA is encouraged by the Government’s request for the Social Impact Investing Taskforce to revisit its final report recommendations from late 2020. The Taskforce, commissioned by the Federal Government in 2019, identified how Government can support solutions to address entrenched disadvantage, achieve measurable impact and facilitate private capital investment in the social impact investing market.

The Taskforce recommendations included the Government co-financing an impact investment wholesale fund to catalyse and scale for-purpose solutions, and setting up a social enterprise growth fund in order to develop a pipeline of businesses tackling social and environmental issues. The Taskforce, which comprised the current Board members of IIA, will revisit its recommendations from 2020 in line with Albanese Government’s policies and priorities.

“The need for social impact investing is more urgent than ever given the impacts of the pandemic, inflation and the economic dislocation and disproportionate impact on vulnerable Australians. By working alongside the Government, we can catalyse the investment of private and institutional capital and transform the market to improve the lives of all Australians and build our economy for the future,” Mr Brandweiner said.