Social enterprise can drive productivity, economic resilience, and budget sustainability

The Commonwealth Economic Reform Roundtable will bring together government, business, and civil society to tackle three of Australia’s most pressing economic challenges: lifting productivity, building economic resilience, and strengthening federal budget sustainability.

Social enterprise needs to be part of this agenda.

We’ve lodged a submission to Treasury outlining the vital role that social enterprise can play in meeting these goals. Social enterprises are businesses that use market mechanisms to deliver public value. They create jobs for Australians experiencing disadvantage, reinvest profits into communities, and provide innovative solutions that reduce public costs.

In addition, redirecting existing government procurement spend towards social enterprise delivers immediate productivity gains - unlocking measurable social and economic returns without additional expenditure.

Continued advocacy in Canberra

In the lead-up to the Roundtable, Social Traders CEO Tara Anderson and Executive Director Innovation and Impact, Alex Hooke, met with senior representatives from Treasury, Finance, the Department of Social Services (DSS) and the Department of Employment and Workplace Relations (DEWR).

“These conversations reaffirmed there’s growing alignment on the role of social enterprise in improving productivity, economic resilience, and budget sustainability,” Tara said.

“We also saw a shared recognition that social procurement is a powerful lever to unlock public value through existing purchasing.”

Our experience in Victoria shows that policy mandates drive market change. The introduction of the state’s Social Procurement Framework significantly increased the number of businesses buying from social enterprises - initially due to compliance requirements, but later because they saw the business value. With mandatory reporting frameworks now in place nationally, the opportunity is ripe to embed social value into the fabric of our economy.

Key recommendations in our submission

Social Traders recommends that government integrate social enterprise into national reform priorities through:

Expanding workforce participation and reducing welfare dependency

• Include social enterprise in the employment services system.
• Scale the Payment by Outcomes trial, generating a $220 million benefit to government.

Driving economic dynamism and innovation

• Leverage the sector’s $5.7 billion annual direct investment into community outcomes to reduce public spending.

Enhancing public value through procurement

• Embed social value and social enterprise into procurement policy, delivering 44,000 jobs for marginalised jobseekers and $4.27 billion in societal savings.

Lifting productivity in the non-market sector

• Implement a National Social Enterprise Strategy to unlock an additional $900 million in direct investment into social causes.

Adopting globally endorsed models

• Align with OECD, UN, and World Economic Forum guidance recognising social enterprise as a proven productivity driver.

You can download our full submission here and review all recommendations in detail.

Building on past submissions

Our call for reform is backed by consistent recommendations from recent parliamentary inquiries that Social Traders has contributed to.

Better Competition, Better Prices – House of Representatives Standing Committee on Economics, 2024 (read more)

Social Traders submitted and gave evidence to the inquiry on economic dynamism, competition and business formation from the House of Representatives Standing Committee on Economics.

The Committee recognised that social enterprises are unique in the economy, blending diversity, dynamism, and a commitment to social good. The Committee shared the view that by adopting a social procurement framework that supports social enterprises, government can use its spending power to generate both social and economic outcomes, thereby creating a more inclusive and beneficial economy.

The committee recommended that:

• Procurement processes be adjusted to allow for greater participation by Small to Medium Enterprises (SMEs) and social enterprises.
• Packages of goods and services can be unbundled to allow for SMEs and social enterprises to effectively compete.
• That the Government develop a social enterprise accreditation scheme to facilitate its procurement of goods and services from social enterprises.

Working Future – Australian Government White Paper on Jobs and Opportunities, 2023 (read more)

Social Traders made a submission as part of the consultation on the Australian Government’s 'Working Future' White Paper released in September 2023. The paper has a section dedicated to ‘Backing social enterprise’ signalling the government's priorities and commitment to the growth of, and collaboration with, the social enterprise sector as the future of Australia’s Employment Services system.

One of ten policy areas and a future reform direction was building capacity to get people into jobs and create job pathways by supporting the growth of the social enterprise sector.

Final report on Workforce Australia Employment Services 2023 (read more)

Social Traders submitted and gave evidence to the Workforce Australia Employment Services inquiry.

The final report made many references to making more targeted use of social enterprises in a rebuilt Commonwealth Employment Services System, particularly as a means of engaging disadvantaged jobseekers and in supporting social procurement initiatives.

The Committee recommended that the Australian Government develop and implement a Commonwealth Social Procurement Framework to leverage Commonwealth spending on major projects and large service contracts to create more employment and training opportunities for long-term unemployed and disadvantaged jobseekers. They recommended this be developed with input from Social Traders, NDS, FairWork and Supply Nation.

The Committee also recommended development of a social enterprise strategy, and endorsement of the certification framework administered by Social Traders.

Next steps

The Economic Reform Roundtable represents a pivotal moment to align Australia’s productivity agenda with inclusive, long-term economic growth.

Social Traders will continue to advocate for policies that embed social value in procurement, employment services, and economic strategy.