Vic Government Sets Sights on Social Impact Bonds
1 June 2016 at 9:40 am
The Victorian Government will explore the use of social impact bonds (SIBs) to address “complex areas of social disadvantage” in the state.
The Andrews government set aside $700,000 in the 2016/17 Victorian budget to trial interventions, with the Department of Treasury and Finance and other departments finalising areas where SIBs would be most effective.
“This could be a real way to address serious social issues, while increasing Victoria’s productivity and competitiveness,” Victorian Treasurer Tim Pallas said this week.
“The Andrews Labor government is looking to explore new ways to assist some of our most disadvantaged Victorians, and help ensure our programs are making a positive impact on the Victorian community.
“As a modern Labor government, we are open to new ideas and will see whether they can be effective in Victoria, while also ensuring that the most vulnerable in our community are protected.”
The government said it was in the early stages of exploring the bonds, which bring together government, service providers and investors to deliver social outcomes.
The budget will be used to help deliver market testing and the procurement phases of the state’s first SIBs.
While the government said the bonds would allow service providers to explore new approaches to social issues, they would not replace existing services.
Investors would provide the necessary funding and be paid on the achievement outcomes that have a positive impact.
However, the government also said, to drive reform within the public sector, improvements in service delivery in existing areas would also be considered.
SIBs have been successful in other Australian states. New South Wales was the first state to trial the bonds in 2013 – the Newpin bond and the Benevolent Society bond.
The Newpin bond successfully restored 66 children in out-of-home care to their families and supported another 35 families to prevent their children from entering care while delivering an 8.9 per cent return to investors in 2015.
The Benevolent Society bond results will be measured at the end of its five-year term.
The NSW Government also announced in April that it would look to expand SIB opportunities.
In September last year the South Australian Government announced a $9 million SIB to provide and support to 400 vulnerable people. It’s Australia’s first bond targeting homelessness, and only the fourth of its kind in the world.