Victorian Treasurer speaks on social impact bonds

Victorian Treasurer Tim Pallas was the keynote speaker at the latest SVA Quarterly breakfast in Melbourne. The event brought together more than 60 leaders from across the government, business and social purpose sectors for a discussion on what role impact investing could play in solving some of Victoria’s most challenging social issues.

The Treasurer spoke strongly about the importance of focusing on outcomes in funding social services:

‘In Government we often end up focusing on getting money out the door, on getting programs up and running, on making sure people get access to services. All these things are important. But – if we can increase the focus on outcomes – we will do a better job of making sure that services actually make a difference to people over the long haul.’

‘If we can fund services on an outcome basis, we can take away many of the input controls that can be so onerous for the community sector providers delivering the services. The focus on innovation and outcomes, and being able to show that something is providing a real benefit to society and to the government, is where the real potential of social impact bonds lies.’

‘We also know that there are a lot of challenges with these types of projects. Experience internationally and in New South Wales has shown that not every one of these projects works, and that the setting-up process can be complex – particularly when deciding on the right metrics and appropriate returns for investors. We are approaching this topic armed with the lessons from other jurisdictions’ experiences, and will need to be careful and deliberate in the way we undertake any social impact bond projects.’

The Treasurer’s address was followed by a panel discussion with Ian Learmonth, Executive Director of Impact Investment at SVA, Cathy Humphrey, Chief Executive of Sacred Heart Mission and Rob Fowler, Chief Financial Officer at superannuation fund HESTA. HESTA have partnered with SVA on a $30 million impact investment fund. Mr Learmonth said he was pleased to hear consensus in the room around the need to align funding with the social outcomes being achieved by different programs and services:

‘It was a privilege to be joined by the Treasurer for this important discussion, and great to hear that the Victorian Government is committed to exploring how they can best support an outcomes focus in the way they allocate funding to the social challenges the state faces.’

‘It was also great to hear the thoughtful questions from the audience, which emphasised not only the opportunity that exists to create real positive change through impact investment; but also the need for government and other players to support the social sector to transition to an outcomes focused environment.’

The SVA Quarterly event was generously hosted by Macquarie.