On 4 February 2015, the NSW Government launched its Social Impact Investment Policy. The policy builds on the success of NSW’s social benefit bonds and sets out the Government’s intent to support a broader social impact investment market in NSW. As part of the policy, the Government aims to deliver two new social impact investment transactions to market each year.

This statement is an action in the policy. It identifies policy areas in which the NSW Government believes social impact investment can achieve better outcomes. It follows the 2015 Statement of Opportunities, which was released with the policy last year.

Key priority areas in the 2016 statement are:

• increasing permanency for children in out-of-home care, particularly through open adoption
• establishing an Aboriginal centre for excellence in Western Sydney
• increasing access to early childhood education.

For each of these areas, this statement outlines the particular issue that Government is interested in addressing and identifies the outcomes sought through a social impact investment. The purpose of this information is to help market stakeholders think about the opportunities and solutions to some of these issues.

Other areas that are also being explored include:

• homelessness among veterans
• improving waste management
• road safety
• domestic and family violence.

This statement will underpin market soundings to be conducted in the coming months. Feedback from these market soundings will inform whether and how Government proceeds with formal requests for proposals (RFP) later this year. This feedback may mean that the proposed outcome measures and target cohorts outlined here may be refined for RFPs. Market consultation may also help identify the type of social impact investment transactions that may be appropriate for each policy area (e.g. a social benefit bond or payment-by-results mechanism). All of these elements will also be subject to further negotiation with successful proponents.

While the NSW Government believes the priority areas outlined in this statement have the most potential for social impact investment at this time, RFP processes will depend on market feedback and be open to proposals in other areas.