Using this benchmark it is possible to track the success of each prisoner and the overall program compared to the broader system. The government pays an amount to investors that is a linked to the savings made on the prisoner not re-offending. Similarly, Hems says a child in foster care typically costs the NSW Government between $30,000 and $50,000 a year. A not-for-profit could then track its savings to government through how many children it had successfully returned to their family home. A portion of these savings could then be used to pay back the principal and pre-arranged yield to investors.
While acknowledging that measuring and tracking the social benefit and fiscal saving to government is difficult, Hems says these two bonds provide a solid case study for how this could be practically done. Treasurer Mike Baird says the pilot projects provide an opportunity to “creatively look at delivery of critical social outcomes while at the same time minimising long-term fiscal risks to the budget”. The project has the capability to be scaled up as other not-for-profits gain the capacity to attract private investors. Baird says these partnerships have the potential to change the culture of service delivery to be focused on outcomes, improving the effectiveness of government spending on social services. The CSI is based at the University of NSW and operates in collaboration with the University of Melbourne and Swinburne University of Technology.
