Impact investors are inherently long-term thinkers, but this year’s budget certainly wasn’t focussed on future building. It was a decidedly populist offering, delivering sweeteners in the run-up to an election.
Economists wept as the solution to inflation, and cost-of-living pressure, was explained as… more government spending.
But even with such ingrained short-termism there remained the potential to offer catalytic funding to social impact organisations, but sadly, few were offered.
An opportunity lost.
Still Waiting on Social Impact Taskforce Recommendations
Impact Investing Australia (IIA) is Australia’s peak-body for impact investing, and while they welcome payments for social impact investment trials for vulnerable priority groups ($3.2 million) and youth at risk of homelessness ($3.2 million), it remains frustrated at the lack of broader support for innovative, market-based models of social welfare delivery.
“With no new, definitive impact investing measures included in the budget, the Government has missed the mark on better leveraging private sector capital to drive an inclusive economic recovery – one that it is resilient to future shocks, drives job creation and re-balances the labour market to provide more opportunities for Australians and regions that need it most.”
A core pillar of IIA’s advocacy has been through contributions to the Social Impact Investment Taskforce, which was funded by the Australian government. But it appears to be another missed opportunity, as the government is yet to provide a response to the final report, which it received in late 2020.
“Impact investments will be accelerated and our economy will be transformed to better serve all Australians, with funding for the Taskforce recommendations,” Said Richard Brandweiner, IIA Chair.
A Confusing Budget for Startups
The long-term focus of impact investing is fed by the very timely innovation of startup social enterprises. Adam Milgrom from Giant Leap says startups are confused by this year’s budget, and its lack of support.
“This is a confusing budget for the startup sector. To start off with there isn’t even a mention of startups in the budget, once again the sector has been lobbed in with small business.” Adam says.
“It’s unusual for us too, as some of our portfolio companies will actually benefit, with funds being poured into retraining, supporting women in the workforce and the NDIS. Yet for companies not tackling a broader issue, there’s little here in terms of support.”
In terms of action on climate change, and support for renewables, no-one is surprised at the lack of support from the current government, but there was still an air of incredulity that the subject could be so completely absent amid dramatic weather events, and so much global action to transition the economy.
“The level of climate policy and support in the federal budget is disappointing. It sidesteps this issue, leaving it to the private sector to make up the shortfall. It’s 2022, we just endured some of the worst flooding we have seen as a direct byproduct from climate change. Surely this should be at the top of the agenda, but it barely copped a mention.” Adam says.
No Support for EV’s
If you were looking for a market-based model that brought together the cutting edge of technology, while also reducing carbon emissions, plus. reducing dependence on foreign oil producers (like Russia), you’d double-down on electric vehicles.
But again, our government has kept a firm grip on the status-quo, and ignored the opportunities around the hottest technology taking over our world.
Chris Cormack is General Manager at Discover Energy, and having spent time as a manager at the Australian Energy Market Operator (AEMO), he knows well the political machinations that are driving our energy policy.
“The government’s continued resistance to give the green light to manufacturers to bring their EV ranges to our shores will continue to impede Australia’s efforts in becoming a greener country. The recent global crises has put a focus on the cost of living so Australia needs to double down on renewable solutions such as electric vehicles (EVs) because, in the long term, they will be what helps reduce living expenses. There is a major opportunity for the government to turn around policy on EVs and dramatically increase the uptake across different parts of the community.” Chris says.
“Electric vehicles currently possess major untapped potential, if the capacity of their batteries can be utilised by energy companies. EV batteries are a game-changer for the energy sector with them being able to store 7-10 times more energy than a standard home battery. Investing in technology that is able to draw from car batteries, like Vehicle to Grid (V2G) smart technology, will mean greater flexibility to cover household demand for electricity and energy companies will be able to give Aussies access to energy for free.