Social Impact Investing Taskforce Terms of Reference
As part of the 2019-20 Budget, the Australian Government announced it will establish a taskforce (the Taskforce) in the Department of the Prime Minister and Cabinet to examine the Commonwealth’s role in the social impact investment (SII) market. The Taskforce will comprise of an independent Expert Panel with SII and social policy expertise, bringing together experts and leaders from a range of fields to develop a Commonwealth SII Strategy, and a support team within the Department of the Prime Minister and Cabinet.
Social impact is a form of investing that generates measurable social outcomes as well as a financial return. It brings together governments, service providers, investors and communities to tackle a range of complex policy issues. Catalysing the market and building on the substantial commitments the Australian Government has made to date has the potential to provide a comprehensive federal-wide mechanism to address complex social issues, from welfare dependence to social housing. This can be achieved by government and private sector capital being utilised to building a stronger culture of robust evaluation and evidence-based decision making, and improving social outcomes for Australians.
Role of the Taskforce
The Taskforce will develop a strategy for the Commonwealth’s role in the SII market, drawing on international, private sector and state and territory government experience. It will identify a way forward for Commonwealth investments in SII, including how SII can provide solutions to address entrenched disadvantage and some of society’s most intractable social problems, ultimately providing evidence-informed recommendations to Government on a comprehensive SII strategy.
In doing so, 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). This analysis will focus on the three forms of SII listed below:
- social impact bonds
- social enterprises
- larger scale social impact investment funds
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.
Membership and operation
The Expert Panel will be chaired by Mr Michael Traill and have a deputy chair, Ms Amanda Miller. Expert Panel members will be appointed by the Prime Minister. Support for the Expert Panel will be provided by the Department of the Prime Minister and Cabinet.
The Taskforce will engage with state and territory governments, the private, not-for-profit sectors, philanthropy, and relevant Commonwealth agencies in the development of the strategy.
The 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.