- SVA is pleased with focus on social innovation bringing together community sector, government and business to deliver housing for low-income Australians
- Welcome $63 million commitment to create the National Housing Finance and Investment Corporation to operate a new bond aggregator to fund construction of social and affordable housing
- $30 million commitment to developing the Australian social impact investing market, including a Social Impact Investment Readiness Fund which opens the door to larger social returns from private sector investment
- Good progress in aligning education funding with the evidence of ‘what works’ in classrooms, following the announcement of the Gonski 2.0 Review
- $52.9 million over four years from 2017-18 to implement a whole-of-government research and evaluation strategy for policies and programs affecting Indigenous Australians
- Expansion of the ParentsNext program will prepare more young, vulnerable parents to enter the workforce
Social Ventures Australia (SVA) has welcomed initiatives announced in the 2017 Federal Budget that draw on expertise from across the community sector, government and business to develop new ideas to solve entrenched social problems and urged the Government to step-up efforts to reduce disadvantage.
SVA CEO Rob Koczkar commented:
‘Australia has experienced more than 20 years of continuous economic growth and increased investment in health, education and social services and yet many Australians continue to experience poverty and exclusion.
‘We are pleased to see that a number of recommendations that we made prior to the Budget have been taken forward in the Government’s announcements this evening, particularly around what SVA believes to be the critical areas of housing, education and employment as well as initiatives for First Australians.
‘It is encouraging to see the Government embrace the potential for impact investing to increase the social returns of private sector investments, and as a pioneer of this approach in Australia, we look forward to working with the Government to develop new impact investing tools.
‘The $263 million investment to expand the ParentsNext program will also greatly assist young parents prepare for work through child care support, training, and financial literacy and numeracy skill development. It is essential that employers are engaged in the program to ensure that parents have the opportunity to move into growing employment sectors and sustainable jobs. Despite the relatively low rates of unemployment there is more to do to ensure that people locked out of the labour market and vulnerable groups, including those with disability or young people who have left school early, have the best chance of accessing the jobs of the future.
‘There are too many Australian’s experiencing disadvantage and we need to consider the suite of policies required – from early childhood interventions through to crisis responses – if we’re going to see a big reduction in disadvantage and become a truly fair and prosperous nation.’
There is a shortage of over 400,000 homes across the country that are both affordable and available to low and very-low income earners. The availability of low-cost housing is one of the most significant issues facing the Government.
The announcement in the Budget to establish a National Housing Finance and Investment Corporation to operate an affordable housing bond aggregator is a significant step forward.
‘SVA has been a firm advocate of a solution that brings together private investment to build affordable housing stock, and we are delighted that the Government is introducing an affordable housing bond aggregator, which we hope will overcome some of the significant barriers to greater private sector investment in the provision of finance for social housing. We look forward to working through the detail of how Government support will unlock private sector investment.
‘Currently community housing organisations can find it hard to get a loan to build more houses for low-income tenants. Through a government backed aggregator, they will be able to access cheaper and longer-term loans and can ultimately build more houses for those who need them most.
‘Connecting institutional investors to social housing will allow community housing providers access to capital at a more affordable rate, helping to drive much needed supply.
‘The Bond Aggregator will need to be supported by further Commonwealth and State reforms if it’s going to deliver supply at the scale it’s needed while it is pleasing to see requirements for States and Territories to meet targets for social and affordable housing.
‘Compared with overseas jurisdictions such as the US and UK, Australia is lagging in its use of innovative ways to finance social housing. The Housing Finance Corporation in the UK currently has outstanding loans exceeding £4.15 billion in value.
‘We believe that this will make a valuable contribution to the pipeline of social housing in Australia, stimulating a better flow of private capital into the sector by addressing the issues of financing costs and financing terms. We are confident that this will have a growing impact on the social housing sector over the coming years.’
SVA also welcomed the Gonski 2.0 Review and said there needed to be a focus not just on resource allocation but also how evidence-informed practice makes its way into the classroom.
‘Since 2000, despite increased government funding, academic performance in Australian schools has been stagnant or declining but the proposed solutions are often not informed by evidence.
‘We welcome the focus of the Gonski 2.0 Review on what the evidence and not the ideologues say will improve learning.
‘Australian students will get better outcomes when teachers and school leaders are supported by a strong evidence base and the tools and training to use it to strengthen their decision making.
‘We hope that the review will deliver a blueprint for embedding evidence-informed practice in classrooms.
‘We look forward to working with Government and the Gonski panel to drive better outcomes for students to ensure that every child in Australia receives the education they deserve.’
SVA is already partnering with several State Governments to test programs in schools and share evidence to strengthen school decision making, through Evidence for Learning, a social enterprise incubated by SVA.
The extension of funding for the universal access to pre-school for all children in the year before is a good example of funding flowing to a service which the evidence overwhelming suggests has beneficial impacts on children’s learning and wellbeing.
As it is only a 12 month extension, a more durable solution with a multi-year agreement must be negotiated soon between the Commonwealth, States and Territories to lock in funding for this vital service for generations of children get the best start in life.
‘SVA is delighted to see a modest investment to fostering a national social impact investing market, building on the hard work of State Governments to develop initiatives like social impact bonds.
‘It is pleasing to see the Government’s intent to partner with State and Territories to trial social impact investing initiatives as well as the establishment of a Social Impact Investment Readiness Fund to build capacity in the non-government and private sectors.
‘Impact investing will never replace Government funding for high quality social programs, however there is an opportunity to unlock further private sector investment, particularly in our large superannuation funds, to deliver greater social impact.
‘State-based social impact bonds provide excellent examples of how private sector investments can make a difference. To create a vibrant market, we also need better data on the social impact of programs and more rigorous evaluations.’
Initiatives for First Australians
SVA welcomes the announcement of $52.9 million over four years from 2017-18 to implement a whole-of-government research and evaluation strategy for policies and programs affecting Indigenous Australians.
Sharing the evidence of what works within Indigenous communities will empower local communities to make informed choices about the investments they make and help scale up effective initiatives.
‘It is pleasing to see the Government making positive steps to solve entrenched social problems however there continues to be much work to improve the lives of people in need.
SVA looks forward to supporting the initiatives set out in this Budget and to working alongside government to generate new solutions to improve the lives of Australia’s most vulnerable people.’
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