Media releases
Westpac in Consortium for Trial of NSW Social Benefit Bonds
20 March 2012
Westpac Group, in a consortium with The Benevolent Society and Commonwealth Bank of Australia, is proud to have been selected by the New South Wales Government to undertake a trial of Social Benefits Bonds with the aim of helping families in need.
The bonds, which would be the first of their kind in Australia, will provide $10 million to fund the establishment of a Family Preservation Service, supporting 550 families over five years.
“Westpac is pleased to participate jointly with the Commonwealth Bank, Australia’s oldest charity and the NSW Government in delivering this innovative approach to providing services that will keep children safe and families together,” said Craig Parker, Executive Director and Head of Structured and Asset Finance at Westpac Institutional Bank.
Under the proposal, The Benevolent Society will be funded by the bond to work with Sydney families that are referred from the New South Wales Family and Community Services and whose children aged six or younger are considered at risk. TBS will work with each family for an average of nine months with the aim of diverting children from “out of home” care.
“We congratulate the NSW Government in leading this new method of financing in Australia and we hope that this project will demonstrate the enormous opportunity available in accessing private sector investment to provide more cost effective and creative solutions in areas of significant need in society,” Mr Parker said.
The New South Wales Government late last year said it wanted to explore innovative financing solutions for the provision of services with a trial to commence in the areas of juvenile recidivism and out-of-home care. The Benevolent Society, Westpac and Commonwealth Bank have been selected as preferred tenderers for out-of-home care services.
Social Benefit Bonds aim to involve the private sector in the provision of certain social services with the Government promising to pay back the value of the bonds at the end of the term based on the effectiveness of the program funded.
“Government spending and philanthropic donations aren't sufficient to address social problems we face in Australia. Initiatives like this will allow new capital to be put to work to address social issues,” said Sandy Blackburn-Wright, Head of Organisational Mentoring and Community Engagement at Westpac.
“This type of financing encourages discipline in the reporting of social outcomes, which means greater transparency for taxpayers and the general public who donate to not-for-profit organisations,” she said.
"For Westpac, this is a concrete step that shows our continuing commitment to New South Wales and reflects our position as a global leader in sustainability,” she said.
Westpac’s funding structure for the bonds aims to expand the universe of investors providing capital to these services by layering the debt into different levels of risk with corresponding levels of return.
Westpac, Commonwealth Bank and TBS will now enter into detailed negotiations to bring the project to fruition with the expectation that the bonds will be issued later in 2012.
About Westpac Institutional Bank
Westpac Institutional Bank (WIB) delivers a broad range of financial services to commercial, corporate, institutional and government customers with connections to Australia and New Zealand.
WIB operates through dedicated industry relationship and specialist product teams with expert knowledge in transactional banking, financial and debt capital markets, specialised capital, and alternative investment solutions.
Customers are supported through Westpac branches and subsidiaries located in Australia, New Zealand, United States, United Kingdom and Asia.