Opportunity for the Federal Government to build better futures through social enterprise procurement

Social enterprises are an innovative type of business that provide specialist support for Australia’s most disadvantaged and vulnerable communities. They also address climate issues. Buying from social enterprises creates sustainable jobs, training, services, environmental outcomes and opportunities that widen the door for marginalised Australians.

Social Traders has a bold 10-year vision to create more than $5.5b in demand for social enterprise products and services which will support over 44,000 jobs for marginalised Australians, deliver 6 million training hours, and enable community services and donations of $128m. The jobs outcomes alone would also generate savings to society of $4.27 Billion by 2030 (using a Deloitte Access Economics proxy for the cost to society for one year of unemployment).

Social Traders is the trailblazer of social enterprise procurement in Australia. In the three years to 2020, Social Traders helped facilitate $222 Million of spend between 110 business and government members and 500 certified social enterprises. The impacts were significant, including 1,400 jobs for the most marginalised, $13m in community services, $2.5m donated to charities, and 5k tonnes of waste diverted from landfill.

Social enterprise procurement is catching on across Australia. Social Traders corporate and government members include leading Australian businesses such as Coles, Westpac, Suncorp, John Holland and Downer. One member, Mirvac have made a public commitment to spend $100 Million with social enterprises by 2030. Thanks to endorsements like this and support from leading philanthropic trusts, Social Traders is driving some of the fastest growth in social enterprise procurement anywhere in the world.

Social enterprise procurement is a ready-made solution to build a fairer and more equal society. We can create a better future for Australia if we seize this opportunity that’s right there in front of us.

We’re calling on the Federal Government to support social enterprise procurement, in three ways:

1. Implement a Social Enterprise Strategy

State and local governments are already supporting and investing in the social enterprise sector, but we are missing the leadership of the Commonwealth.

Social Traders and our partners have supported the Victorian and Queensland state governments to create their own social enterprise strategies backed by investment: Victorian Government’s second Social Enterprise Strategy launched in 2021 and Queensland Government’s Social Enterprise Strategy launched in 2019. The Commonwealth has a significant opportunity to scale and leverage the support for social enterprises from state and local governments through a strategic framework for social enterprise sector development nationally.

Social Traders recommends that the Federal Government develop a national social enterprise strategy - a plan of action to enable the growth of business for good to unlock social innovation, and positive impact. This should include funding agreements with the states to direct a proportion of spend to social enterprises. This should be done with Social Enterprise Australia – the new organisation established to lead the national strategy process, connect actors and efforts across the sector and engage with the Federal Government.

2. Explicitly support social enterprise in procurement policy

One of the most effective ways to deliver social enterprise procurement is through social procurement policy. State governments have policy frameworks in place, but again we are missing leadership from the Commonwealth.

Social Traders played a key role in shaping the Victorian Social Procurement Framework. The Western Australia Governments also has a Social Procurement Framework in place. Queensland Procurement Policy explicitly aims to “support disadvantaged Queenslanders by increasing procurement with genuine, quality social enterprises”. The New South Wales Government is exploring similar opportunities.

The Commonwealth has an exciting opportunity to lead by example by elevating social enterprises within the Commonwealth Procurement Rules.

3. Contribute funding to social enterprise employment and skills outcomes

We welcome the recent landmark $24.6 Million investment into social enterprises supporting refugee employment, using the Social Traders social enterprise certification as part of the grant criteria. We also welcome the first $3.8M Payment By Outcomes trial for jobs-focused social enterprises led by White Box Enterprises.

Social Traders calls on the Federal Government to provide similar resourcing for the social enterprise sector, and to have social enterprise network building work supported at the national level.

With our partners, we are calling on the leadership of the government

Social Traders is calling for State, Territory and Federal Governments to utilise the ready-made solution of social enterprise. We make this ask with our sector partners Social Enterprise Australia, White Box Enterprises and the alliance of Australia’s practitioner-led state and territory social enterprise networks: SENVIC, SASEC, QSEC, SECNA, Impact North, WASEC & SENTAS.

Through social enterprise procurement we can ensure that no matter the starting point, no one has restrictions on their journey in life. We can create an economy that works for people (not the other way around). We can build a fairer and more equitable Australia.

Image courtesy of the team over at certified social enterprise Community Construction

For insight into how we work with governments to embed social enterprise procurement policy visit the article here.

Learn more about business membership with Social Traders.