The Australian Government has released a discussion paper on impact investing and the development of the impact investment market in Australia.
Launched on 28 January 2017, with submissions closing on 27 February, the discussion paper sets out a proposed whole of government position on social impact investing for consultation, including the objectives the Australian Government has for its role in social impact investing, principles to guide Australian Government involvement in the social impact investing market and determining possible regulatory barriers that can be addressed by the Commonwealth to support the market.
The Discussion Paper proposes that the Australian Government could support impact investing by creating an enabling environment for impact investing and by funding or co-funding impact investments.
Impact Investing Australia has welcomed the Australian Government’s Social Impact Investment Discussion Paper, underscoring the important role for the Australian Government in developing the market for impact investing.
“We are pleased the Government is examining the role it can play in developing the impact investment market in Australia,” said Rosemary Addis, Chair of Impact Investing Australia. “The Australian Government has a critical leadership role to play in catalysing the market and realising the opportunities impact investing offers.”
“Impact investing holds enormous potential to address some of our most intractable societal challenges, by unlocking additional forms of capital and finding innovative solutions.”
“Importantly, impact investing provides government with a powerful tool for delivering better societal outcomes for people and communities as well as relieving structural challenges to the budget through the leverage of government funds to attract private capital and resources.”
“International evidence and local experience demonstrates the powerful effect of government leadership and the difference that policy initiatives and relatively modest government spending can have on catalysing market activity.”
The Australian Advisory Board on Impact Investing, which is Australia’s representative body on the Global Social Impact Investment Steering Group, has developed a comprehensive strategy to grow impact investing in and from Australia, including identifying where government impact can be the greatest in growing the opportunities for impact investing.
“The establishment of an independent financial institution – Impact Capital Australia – has been singled out as the most significant step that can be taken to mobilise greater capital and achieve greater outcomes across a range of social issues facing Australia.”
Impact Capital Australia would have two key roles: as a wholesale investor and impact investment market champion. It would create a multiplier effect for government funding and drive growth, diversity and social innovation.
It would spearhead new funds to invest in local jobs, de-risk investment in infrastructure and demonstrate models of financing in areas of high demand and growth such as housing, aged care and disability.