Inquiry into promoting economic dynamism, competition and business formation: Opening statement from Social Enterprise Australia

Hearing: House of Representatives, Standing Committee, Economics (Inquiry into promoting economic dynamism, competition and business formation (Melbourne, VIC))

Time: 10.15AM - 11:15AM

Location: Stamford Plaza Hotel, Melbourne

Committee Chair: Dr Daniel Mulino

Opening statement of Jess Moore, CEO of Social Enterprise Australia

Before I start, I acknowledge that we are meeting on the traditional lands of the Kulin nation.

Social Enterprise Australia is the national peak body for social enterprise.

We support all people having access to decent work, environmental care, services being people-centred, and community-led innovation.

We welcome this inquiry and the opportunity today to contribute.

Economic dynamism, competition and business formation - even the economy itself - are not ends but means. They provide ways to fulfil purpose.

We believe that the main purpose of our economy should be social and environmental wellbeing.

To this end, the social enterprise sector can help.

A social enterprise is a business, for good. They trade like any other business, but exist specifically to make the world a better place.

Social enterprises innovate using a compass of public benefit. They create employment opportunities for people most shut out of work, provide care for people and the planet, deepen democracy and social connection, and address product or service gaps, particularly in disadvantaged communities and thin markets.

These businesses for good have many faces – a café employing survivors of domestic violence, an Aboriginal led business working in bushfire mitigation, a community-owned wind farm, or a provider of quality affordable housing.

They do good and raise expectations in competitive markets that business should do more good and less harm.

They provide sandboxes for social innovation, testing new ways to tackle social and environmental challenges.

We commissioned research to estimate the size and economic contribution of social enterprise in Australia. It found that there are about 12,000 social enterprises in Australia, that make a combined economic contribution of $21.3 billion annually, and employ about 206,000 people. 

I stress that this is an estimate, that it does not include an estimate of impact contribution, and we make recommendations to address this.

We also know from the sector that many face structural barriers to sustainability and growth.

This said, the social enterprise sector is held back due to fragmentation, under-representation, and being underserved. 

Because social enterprise sits between traditional business and charity, many fall through the gaps in the supports that exist for the two sectors. It does the job of both without the enablers of either.

This is particularly the case for access to appropriate finance, being paid in the market for the outcomes they deliver, the development of specialised capabilities and business models, and other supporting factors such as data, certification and coordinating infrastructure.

As a result, social enterprise is not realising its potential to contribute. 

The Commonwealth Government can help change this.

It can partner with the Sector to build an enabling environment that spawns social innovation and sizeable and sustainable public value.

We see this being challenge-led, directing innovation to specific challenges that no single entity or group can address on their own.

To do this, we seek a federally adopted social enterprise national strategy that is:

1. Is co-designed and powered by a genuine partnership between the sector and Government.
2. Is underpinned by data and certification.
3. Incorporates social procurement, access to finance, outcome payments, and capability building.

Specifically,, we recommend that the Commonwealth Government:

• Invest in organising infrastructure that enables the sector to have a shared voice, develop itself, and work in partnership with the Government.
• Invest in data sharing and social enterprise data initiatives and infrastructure so that evidence drives decisions.
• Invest in and use certification to protect the integrity of social enterprises.
• Establish a social procurement framework that names and puts targets to buying from social enterprises.
• Enhance access to a capital mix that can support social enterprises to launch, develop, and grow.
• Pay social enterprises for the role they play in creating public or community outcomes.
• Invest in social enterprise capability building, in the sector and in Government itself.