Abstract
Sovereign wealth funds (SWFs) have gained traction in recent years as effective capital pools created by governments to invest surplus funds in markets, both internationally and domestically. This chapter looks at the role that SWFs can play in Australia’s next resources boom, and whether SWFs can provide a sustainable development pathway through an alternative and innovative investment structure such as social impact investing. We shed light on the dynamics and role of SWFs in promoting sustainable development in Australia and the role of impact investing for accelerating sustainable development.
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Notes
- 1.
Types of sovereign investment vehicles include SWFs, Pension Funds, State-Owned Enterprises, and Sovereign Wealth Enterprises (Sovereign Wealth Fund Institute, 2008-2018).
- 2.
The IMFC is a committee of the Board of Governors of the International Monetary Fund (IMF), comprising representatives of all 185 IMF member countries..
- 3.
The DisabilityCare Australia Fund was established in 2014 as a result of the DisabilityCare Australian Funds Act 2013, to help the National Disability Insurance Scheme (NDIS), with the goal to help support Australians with significant and permanent disabilities and their families and carers. The Fund reimburses States, Territories and the Commonwealth for expenditure incurred in relation to the National Disability Insurance Scheme Act 2013 and to fund initial implementation of this Act.
- 4.
The Medical Research Future Fund was established by the Medical Research Future Fund Act 2015 to improve the health and wellbeing of Australians by providing grants of financial assistance to support medical research and medical innovation.
- 5.
The Nation-Building Funds were established in 2008 as a result of the Nation-Building Funds Act 2008, namely the Building Australia Fund (BAF) and the Education Investment Fund (EIF). The BAF enhances the Government’s ability to make payments in relation to the development of transport, communications, energy and water infrastructure and in relation to eligible national broadband matters. The EIF enhances the State’s ability to make payments in relation to the development of higher education infrastructure, research infrastructure, vocational education and training infrastructure. Health and Hospitals Fund: to support capital investment in health infrastructure.
- 6.
Social impact implies the inclusion of social, environmental and economic impact in its meaning.
- 7.
Blended value is the recognition that capital, community, and commerce can create more together than the sum of the three independently. See Bugg-Levine & Emerson (2011).
- 8.
Coupon rates are determined by considering the potential savings that government would receive as a result of the successful outcomes.
- 9.
SWFs could also be leverage lenders (or the outcome funder), at which point they will no longer be investing, but distributing funds.
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Spencer, R., Pereira, E.G., Matambanadzo, F. (2021). Sovereign Wealth Funds and Impact Investing in Australia. In: Pereira, E.G., Spencer, R., Moses, J.W. (eds) Sovereign Wealth Funds, Local Content Policies and CSR. CSR, Sustainability, Ethics & Governance. Springer, Cham. https://doi.org/10.1007/978-3-030-56092-8_12
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