NSW has launched Australia’s first Social Impact Investment Policy as part of a bold new approach to providing long-term social and economic benefits for NSW alongside protecting the vulnerable.
Launched in Sydney on 4 February, the Policy outlines 10 actions to grow impact investing including bringing two new social impact investment transactions to market each year and establishing a public database that details the benchmark costs and outcomes for delivering services.
“We recognise that government cannot solve these challenges alone. By harnessing the innovation and capital of the non-government sectors, we can deliver better outcomes for our community and better value for taxpayers” said NSW Premier Mike Baird.
In 2013, the NSW Government created Australia’s first social impact bonds, seeking to deliver better services and results for families at risk:
- Newpin Social Benefit Bond – this bond funds the expansion of a UnitingCare Burnside program that works intensively with families to either safely return children in care to their families, or prevent children from entering care. With a principal of $7 million, the bond targets a financial return of 10-12 per cent per annum for investors over its seven year term.
- Benevolent Society Bond – this bond funds services for up to 400 families over five years to help them deal with issues such as domestic violence, substance misuse, mental health, unstable housing and family functioning. The bond raised $10 million in private capital.
NSW Treasurer Andrew Constance said the NSW Government will build on the encouraging early results of these bonds to develop more innovative ways to support vulnerable members in the community.
“The Newpin bond has allowed UnitingCare Burnside to run intensive courses for parents, aimed at creating safe family environments to restore children from out-of-home care or prevent them from entering care in the first place,” Mr Constance said.
“In its first year, 28 children were successfully restored to their families from out-of-home care, while the Benevolent Society bond has also seen positive results in keeping families together.
“The NSW Government is striving to develop new and innovative ways to deliver services and supports to our community and social benefit bonds are an example of how we can do exactly that.
“Not only are we tapping into a new source of funding by partnering with investors, these bonds and other models of social impact investment transactions aim to deliver better social outcomes and financial returns to investors, while providing cost savings to government.”
“We are thrilled by the NSW Government’s commitment to growing the market for impact investing and realising the opportunities that come when you bring capital and expertise from different sectors together to address social challenges” said Daniel Madhavan, CEO of Impact Investing Australia.
“In Australia and further afield, economies face growing gaps between societal needs and the ability to pay for them. Governments and philanthropy alone can’t deliver a prosperous and sustainable society and a healthy economy. We need different ways of doing business.”
“Importantly, this policy is focused on delivering better outcomes for people and communities in need which will deliver greater innovation, efficiencies and capital flows” said Rosemary Addis, co-founder of Impact Investing Australia, Chair of the Australian Advisory Board on Impact Investing and Australia’s representative on the Social Impact Investment Taskforce established by the G8.
“It is consistent with and complements the Australian Advisory Board on Impact Investing’s strategy to build the market for impact investing.”
“We commend the NSW Government for recognising the critical role governments need to play in developing impact investing – both as market facilitators and as market participants.”
To read Impact Investing Australia’s media release responding to the announcement, click here.
The Social Impact Investment Policy and more information on Social Impact Investment is available at www.dpc.nsw.gov.au/sii.