National Australia Bank (NAB) and Life Without Barriers today launched a social benefit bond (SBB) that will help young people at risk of criminal reoffending. It is the Queensland Government’s first social bond that seeks to reduce reoffending by young people.
Investors in the bond, arranged and managed by NAB, will fund the establishment of Queensland’s first Multi Systemic Therapy (MST) program, which will be delivered by social purpose organisation Life Without Barriers. The achievement of agreed outcomes from the program will trigger performance returns to investors.
Queensland Treasurer Curtis Pitt said the Queensland Government is committed to reducing reoffending rates, particularly among young offenders.
“The current reoffending rate for high risk young people aged 10-16 years is 80 per cent*, and the SBB target is to achieve a significant reduction in the reoffending rate,” Mr Pitt said. “The SBB model is particularly applicable in situations where there is no alternative service provided for those young people most in need.”
The MST program will target high risk young people aged 10 to 16 years in Brisbane and surrounding areas, including the Sunshine Coast, Ipswich and the Gold Coast. It helps young offenders and their families deal with family functioning, school participation rates and substance abuse. The therapy is conducted in the home at times that suit the offender and the family.
Chief Executive of Life Without Barriers Claire Robbs said the program has proven to deliver effective results in breaking young offenders out of a cycle of reoffending.
“Without a change from repeat offending, many young people will continue to offend into an adult life,” Claire Robbs said. “It is well known that punitive sanctions against young offenders, such as detention, are ineffective in reducing reoffending in many cases. This SBB provides investors with an opportunity to play a part in shaping an individual’s future, and reduce the economic, social and financial costs to governments and communities.”
National Australia Bank’s Chief Customer Officer Corporate & Institutional Banking Mike Baird said social benefit bonds are a creative way of delivering critical social outcomes for those most at-risk in our community.
“This is the second social benefit transaction arranged by NAB where we have brought together the resources and expertise of private investors, social enterprise and government,” Mr Baird said. “We are proud to work with the government and non-government sectors to deliver better outcomes for the community and help address the social problems faced by many of our customers and their families.”
The $8.2 million bond will pay a minimum coupon of 3% per annum over its 6.75 year life. Coupon payments from the third-year onward are dependent upon the performance level for the reduction in frequency of offending, as well as whether the Seriousness of Offending Improvement Threshold of 25% reduction in the frequency of offending behaviour is met.
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