For the second year running, the Turnbull Government has provided funding for the growing ‘social impact investing’ market. Scott Morrison’s second and third budgets have now promised a total of $28.5 million over ten years for this emerging area of policy interest.
Here is the spending breakdown over the forward years of the budget:
As you can see, not all of the promised funding hits over the coming four years - $8.3 million is pushed into the ‘out years’ (aka the ‘Never Never’), while the bulk of the funding falls in the coming three financial years and for the trials themselves.
What’s the money for?
While there are bureaucrats perhaps asking themselves a similar question now, we can get an indication by looking at the language in the budget papers themselves. Budget Paper 2, 2017/18, said that ‘social impact investing’ “…is an innovative, outcomes-based approach … to deliver a range of social and environmental outcomes.”
The use of the word ‘outcomes’ in the above would seem to indicate a preference for the types of outcomes-based contracts of which Social Impact/Benefit Bonds form a major part here in Australia. That said, the Government’s ‘principles for social impact investing’ released early in 2017 also talk about ‘debt and equity financing’. Our assessment, however, is that the Government has a very limited appetite for and interest in getting involved in these existing capital markets.
Which leads us back to outcomes-based commissioning….
What about the ‘measurement’ bit?
You may remember the publication of the Government’s ‘principles for social impact investing’ early in 2017. The ‘impact framework’ will be developed to align with the principles. You can refresh yourself on the principles, here:
In other words, watch this space.
Budget Paper 2 – 2017/18: https://www.budget.gov.au/2017-18/content/bp2/html/
Budget Paper 2 – 2018/19: https://www.budget.gov.au/2018-19/content/bp2/index.html
Australian Government principles for social impact investing: