We rise and fall together

Helping vulnerable Australians when times get tough and preventing people falling through the cracks is not just compassionate – it’s wise, writes Community Sector Banking CEO Andrew Cairns.

One of the growing trends in international development is micro lending and social entrepreneurship. The idea is to help individuals and communities in developing countries to create a small enterprise that can be connected to an inclusive market system. In essence it’s about applying the old adage of teaching a man to fish instead of giving him one – so you can feed him for a lifetime rather than just a day. 

It is appealing to governments because of its potential to end a cycle of dependence on aid by empowering recipients to generate a sustainable source of income for themselves. And it is appealing to industry because the economic development of a neighbour creates a new market for exports. 

But if supporting economic development and poverty alleviation in our neighbouring countries were in the interest of Australia’s private sector, wouldn’t the same be true of our domestic approach?

Just as global trade has created links within the international community so that countries prosper together rather than at each other’s expense, the Australian community also rises and falls together. 

The OECD has found “the single biggest impact on growth is the widening gap between the lower middle class and poor households compared to the rest of society”. That’s why we need to stop looking at our social services as a cost, and recognise that they are an investment in our shared prosperity. 

Helping vulnerable Australians when times get tough and preventing people falling through the cracks is not just compassionate – it’s wise. The more Australians who are thriving and participating fully in our society, the more economic activity and opportunities will be generated. 

The biggest hurdle to overcome is any sense that individuals are solely responsible for their own welfare. We are told that we live in a meritocracy and that people get what they deserve, but that assumes a level playing field. Nobody chooses to be disadvantaged – most often they are victims of terrible fortune or have been failed by society. It is all too easy to blame someone for becoming homeless or drug dependent but the truth is we don’t all get the same childhood, education, opportunity, and good health or mental health. So, let’s put to rest the argument that anyone is undeserving of our collective support and move on to how we get it done. 

Government cannot escape its responsibility for providing universal health and education services, and a social safety net in the form of housing, financial payments and subsidies. However, the government cheque book is not a complete solution for all vulnerable people or social challenges. If we all have a stake in the welfare of our fellow Australians, then every business and individual should help make an investment in our social services. 

Four years ago, when he was minister for social services, Prime Minister Scott Morrison called for private sector investment in solving social problems but acknowledged that it would need to be a good deal for the sector. For many companies there is a question over both the direct incentive and mechanism for making that sort of investment. 

In some cases, there is a natural incentive for companies to make particular types of investments. For example, a report released last year by the Commonwealth Fund and KPMG recommended that investing in social services should be a core strategy for healthcare companies because addressing the social determinants of health is good for their business model. Simply put, if people had a roof over their heads and access to education, the less likely they were to experience ill health and require expensive treatment.

However, where there isn’t a strong natural incentive, it is important for civil society and government to create mechanisms for investment that will provide a decent return to the private sector. For example, social investment bonds or lending to social entrepreneurship programs could be further expanded or innovated. Crucially, we also need to get better at measuring the impact of such programs because without demonstrating a clear social benefit, it is hard for companies to justify that sort of investment.

There is also an opportunity for individuals to positively reinforce social service investment by voting with their wallets. If conscious consumers choose to buy from companies that are committed to tackling social challenges, it creates an additional incentive for the private sector to step up.  

The bottom line is that we should all do our bit to help out those who find themselves at their lowest point, because we rise and fall together. And if we do it with investment rather than charity, we can create sustainable solutions to enduring social challenges.