The Department of the Prime Minister and Cabinet has published the Terms of Reference for its Social Impact Investing Taskforce which has been appointed to examine the Commonwealth’s role in the social impact investment (SII) market.
The main forms of social impact investing currently include but are not limited to:
- social enterprises: businesses which aim to achieve both financial and social or environmental outcomes through their work;
- social impact bonds: contracts between the government, investors and service providers to trial innovative interventions — a form of payment-by-results contracts, wherein service providers are paid on the results they achieve;
- social impact investment funds: larger-scale funds which pool funds from investors to invest in several social or environmental impact investments.
The Taskforce will:
- Conduct a national stocktake of SII initiatives across Australia and undertake an assessment of existing Commonwealth commitments and programs, including reviewing evaluations of current trials and capacity building measures.
- Identify what changes in Commonwealth policy are needed to facilitate scalable private capital investment in the SII market, including regulatory barriers inhibiting its growth and potential mechanisms or structures to further enable its growth (such as a permanent capital or co‑investment fund with specific attention to models adopted by the United Kingdom).
- Identify specific barriers where government policy or market failures prevent private entrepreneurs from addressing social problems, such as entrenched disadvantage and impediments to social housing.
- Outline ways to improve the sharing of data, analysis and modelling to support SII, in particular the measurement of outcomes and calculating outcomes-based payments.
- Identify opportunities for a co-ordinated federal and state government approach to enable larger scale investments by mainstream institutional funds which meet relevant financial return hurdles and have measurable social impact.
The Taskforce Expert Panel will provide an initial report to Government on the development of the Strategy by the end of 2019, and a final Strategy by mid-2020.
