By Sabina Lim
Sabina represented the University of Melbourne Faculty of Business and Economics at the 2016 OECD Forum in Paris.
As Australia enters a new economic era defined by the end of the mining boom, the Australian government must grapple with the challenges of ‘an ageing population, a challenging budget repair task and ever-increasing expectations around social expenditure’ (Fraser, 2015). Critically, a key issue for government will be finding sustainable methods of financing to meet current and rapidly expanding obligations in health and aged care services. The need for new, innovative financing models is increasingly relevant in today’s economic setting.
Social Impact Investing (SII, or impact investing) is one field that has been gaining traction in recent years and whose potential has been recognised by bodies such as the Organisation for Economic Co-operation and Development (OECD) and members of the G8 Taskforce for Social Impact Investment, established in 2013. Social impact investments are made into organisations, projects or funds with the intention of generating positive social and environmental outcomes, alongside a financial return. Impact investments in the United Kingdom and United States have already demonstrated potential to address service gaps in health and aged care sectors.
With the Australian impact investing market still in its nascent stages, the government is in a unique position to play a significant role in fostering its development. Targeting health and ageing as a priority area, supporting the establishment of an independent market intermediary, breaking down regulatory barriers to investment, and providing direct leadership and engagement are all critical to harness its potential and help unlock capital in a market estimated to reach A$32 billion domestically over the next decade (Addis, McCutchan & Munro, 2015).Read More