The Queensland Government has announced a new program to pilot social impact bonds, becoming the second jurisdiction in Australia to explore this innovative approach to tackling endemic social issues.
As part of the Palaszczuk Government’s first State Budget, Treasure Curtis Pitt has announced a $2 million program to pilot three social impact bonds working to address issues including homelessness and re-offending .
“The Government will pilot three Social Benefit Bonds which will be designed to address targeted social issues where early intervention can promote alternatives pathways for vulnerable Queenslanders,” Mr Pitt said.
Social impact bonds (also called social benefit bonds) are a type of ‘payment by outcomes’ funding mechanism which engages private capital. Typically, instead of a government paying directly for the provision of a social service, private investors provide capital to a service provider to achieve agreed-upon social outcomes. If these outcomes are achieved, there are cost savings to government, which are used to repay the upfront investment along with a financial return.
Queensland Treasury is leading this cross-agency initiative in collaboration with partner agencies.
A Social Benefit Bonds Readiness Fund of $1 million will also be made available for assisting shortlisted service providers in the co-design phase of the initiative.