NAB makes impact investment into program looking to reduce prison inmates and rate of re-incarceration
National Australia Bank has announced it will help finance a program called On TRACC (Transition Reintegration and Community Connection Service) to reduce the number of inmates in prison and the rate of re-offending. This is an Australian first for social impact investment to be used to target parolees and their subsequent re-incarceration.
According to a report from ABC Radio National, more than half of the people in prison will re-offend and return, creating an enormous cost burden. The re-conviction rate within two years in NSW is 74 percent for non-Aboriginal people and 86 percent for Aboriginal people.
The lack of post-release support not only affects parolees and their community but also places a large financial burden on the economy. The average national daily cost of a prisoner is $290. More effective measures need to be found and funded to address not the need for preventing a inmates return, rather than locking them up.
On TRACC is a new program that was issued by the NSW Government to decrease the cost of incarceration and increase community safety. Treasurer Gladys Berejiklian and Minister for Corrections David Elliott announced the program is part of a joint venture with not-for-profit groups, the Australian Community Support Organisation (ACSO) and arbias, which are both experienced providers of early intervention for people in the criminal justice system.
“This program will support the Government’s commitment to reduce reoffending by five percent by 2019,” said Elliot. “Rehabilitation services must continue once an offender is released, to ensure they do not return to prison. This program is designed to help parolees to reintegrate into the community and improve community safety.”
The investment will provide support for 3,900 parolees over five years to assist their reintegration into the community. On TRACC will give parolees intensive individualised support for the crucial stages in their reintroduction to their community, in particular in their first 16 weeks of parole.
“NSW is leading the way when it comes to Social Impact Investment – and it allows us to address serious challenges facing our community while harnessing the expertise of the not-for-profit sector as well as financial support from private investors,” said Berejiklian.
On TRACC takes a new approach to addressing the persistent challenges in the justice system. NAB director of capital financing solutions, James Waddell said this is made possible through a unique partnership between government, not-for-profit and corporate sectors.
“The intended outcome is to reduce the cost to society and government by reducing the number of inmates in the prison system and ensure that parolees are given the best chance of being reintegrated into society.”
“NAB’s role in financing this program demonstrates our commitment to providing innovative financing solutions that will deliver better societal outcomes for all Australians.”
Social innovation at NAB Impact Investment has created many opportunities for investors seeking to address social or environmental challenges and building a financial return. To date NAB has committed $1.5 million to support mission-led organisations in delivering finance solutions to scale their impact.
This is NAB’s third social impact investment in NSW, following on from the Newpin and The Benevolent Society social benefit bonds that were implemented in 2013. Both bonds work with vulnerable families to prevent children from entering out-of-home care or to safely reunite them with their families. The bonds also contribute to achieve better outcomes for patients with chronic and mental health conditions.
The collaboration between both joint investors, NAB and ACSO highlights the potential financial service organisations, the community sector, startups, and the government have in achieving real social impact and finding solutions to issues that affect both the economy and the community.
CEO of Impact Investing Australia, Daniel Madhavan said the collaboration between all sectors provides a unique model for tackling the issues surrounding inmate re-incarceration.
“Through its whole of government policy and innovative transactions, NSW has played a pioneering role in harnessing impact investment and growing the opportunities for private capital to work alongside public and philanthropic funds in delivering measurable positive social outcomes.
“We are encouraging a more active role for government at all levels to enable and grow the opportunities for impact investment. Without government engagement, the potential for impact investment in Australia will not be realised.”
The investment comes at a time when governments and larger organisations are increasingly looking to social impact and social enterprise startups to help solve community problems. Just earlier this week Westpac opened applications for its annual Social Change Fellowship program, which this year is looking to invest in people rather than projects, designed to improve the wellbeing of Australians and inspire positive social change, while Melbourne-based social enterprise accelerator One10 recently opened a new office in Sydney, part of its aim to increase the uptake of socially and environmentally responsible practices and build out more of these products and services both nationally and globally.
Image: Gladys Berejiklian. Source: The Daily Telegraph.