The Treasurer’s Economic Reform Roundtable later this month presents Australia with an opportunity to implement structural reforms that will benefit generations of Australians. Following the Albanese government’s May 2025 election victory, the government has the resounding political mandate to pursue reforms comparable to those that have shaped modern Australia.
Consider some of our most successful economic reforms: compulsory superannuation introduced by Hawke and Keating, and the GST implemented by Howard and Costello. Both faced initial resistance yet the consensus would be these have fundamentally strengthened our economy and improved social outcomes. These reforms demonstrate that structural change, when well-designed and intentional, creates lasting benefits.
The superannuation system, now worth $4.2 trillion and projected to reach $9 trillion by 2040, exemplifies how bold policy can transform into national advantage. This pool of patient capital represents an opportunity to shape our social infrastructure and provide the services and support Australians need without an over-reliance on taxpayer funded subsidies.
Capitalism 2.0
Global capital markets are evolving. The traditional focus on risk and return now includes a third dimension: impact. This framework and evolution towards a “Capitalism 2.0,” recognises that financial performance and social outcomes reinforce each other. Evidence from global markets supports this shift, impact investing has now reached $1.571 trillion globally according to GIIN’s Sizing the Impact Investing Market 2024 report.
As Chair of the Social Impact Investment Taskforce, initially convened In 2017, we developed practical mechanisms to mobilise institutional capital for social infrastructure in Australia. Our recommendations were for a set of connected key initiatives to build the social impact investing market to scale and included:
- Establishing a Commonwealth-backed social impact wholesaler. The wholesaler, akin to the Clean Energy Finance Corporation, would invest in and build the market for large scale social impact investing by targeting investments in quality fund managers and providing the capital to crowd in additional investment from mainstream funders;
- Creating an Early Stage Foundation to build the small to mid size social enterprise market. This draws on the precedent of the UK’s Access Foundation, which has been highly effective in developing and supporting high quality social enterprises to achieve their potential;
- An Outcomes Fund, which the Commonwealth government committed $100m to in the 2024 budget, to streamline and extend the reach of the design principle behind the 17 Social Benefit Bonds implemented in Australia – providing long term funding from external investors repaid based on clear outcome metrics for programs supporting clients;
- Clearer descriptors from APRA to provide clarity about the capacity for large scale Impact Investing as aligned with the sole purpose test in superannuation fund legislation.
From Early Learning to Aged Care: Building the Infrastructure of Care
At For Purpose Investment Partners (FPIP), we invest in businesses essential to people and communities across aged care, skills education, specialist disability accommodation, and disability services. We select quality companies in social sectors and enhance them by combining private and social sector expertise. Our network provides new leadership, strengthened governance, impact measurement, and commercial capability alongside capital. This comprehensive approach transforms businesses while creating value for investors.
In 2024, our approach was backed by institutional investors with commitments by Qantas Superannuation ($75m) and Australian Ethical ($30m) to our aged care platform. Across our portfolio, we see that mission-aligned ownership drives operational excellence. FPIP was founded as a nonprofit large scale impact investor, mission driven with the objective of using business disciplines for social purpose to produce long term, ethical, institutional grade risk weighted investment returns.
It draws heavily on the experience of the consortia that became Goodstart Early Learning. Faced with the collapse of ABC Learning, as CEO of Social Ventures Australia I had the privileged opportunity of working closely with Mission Australia, The Benevolent Society and Brotherhood of St Lawrence to create what has now become one of Australia’s largest social enterprises. Goodstart proved to investors that doing good and doing well delivered both financial and social value.
Goodstart is a blueprint to strengthen economic productivity, for over a decade it has demonstrated that when Australians receive quality services delivered by a skilled workforce, then patient, long-term capital is rewarded (12% annual financial return over 8 years) – all while reducing pressure on government funding by mobilising private capital for essential services.
Transforming Australia’s Economic Future
The scale of both the opportunity and need shows investment in social infrastructure is essential for our continued national wellbeing. Infrastructure Australia’s most recent audit report articulated the importance;
“Our growing and ageing population, increasing urbanisation, migration, advancements in technology, and the changing nature of work will impact this sector over the next 15 years and beyond. These trends will increase demand for social infrastructure, particularly in our cities, and change the expectations people have for the variety, quality and accessibility of social infrastructure services and assets.“
With Australia’s superannuation assets projected to reach $9 trillion by 2040, simple maths tells us that even a conservative allocation to large scale social infrastructure investment of 2-3% would deliver investment commitments of $84-$126 billion to transform Australia’s social infrastructure deficit.
These allocations would deliver institutional grade returns while funding the services Australians need, directly supporting the roundtable’s objectives.
Roadmap to Reform
The Treasurer’s roundtable offers Australia the chance to lead in aligning capital with purpose. Impact investment addresses each of the roundtable’s objectives: it enhances productivity by funding quality education and care services, builds resilience through long-term investment horizons that weather global uncertainty, and strengthens budget sustainability by mobilising private capital for public benefit.
The choice before us echoes what Ezra Klein calls the ‘abundance agenda’ – building systems that generate prosperity rather than merely redistributing scarcity. Impact investment offers precisely this path: an economy where financial success and social progress reinforce each other.
These reforms can begin immediately. Treasury has the roadmap. The superannuation sector has the capital. Social enterprises have the expertise. What we need is the political will to act.
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