Financing justice reinvestment: Three challenges for public sector accounting

Stream: Social policy as re-investment: can justice (re-) investment overcome fiscal constraints on social spending?
Date: Wednesday, 11 September 2019
Time: 1.25 pm – 2.25 pm

Abstract

This paper explores possibilities for financing justice reinvestment programs, focusing on accounting issues in NSW budgetary frameworks. The Maranguka trial project in Burke shows that spending on community-led initiatives reduces costs for governments by lowering rates of Indigenous incarceration. We identify three types of public financing challenges facing efforts to ‘reinvest’ these savings from prisons into communities. First, the savings are realised in different portfolios to those responsible for funding the community projects. Second, the savings occur after the spending on the communities projects is initially financed. Third, the government does not necessarily connect savings to spending by accounting for avoided costs. Drawing on evidence from ‘social finance’ instruments in other areas of policy, including social impact bonds and social housing bond aggregators, we discuss whether and how a financing mechanism for justice reinvestment could overcome the three challenges. We propose a set of accounting principles that enable the reallocation of savings through flexible government funding, access to finance prior to savings through government borrowing and advances, and the tracking of savings through the internalisation of risks and returns within the public sector. These principles are designed to inform the design of new financial mechanisms for scaling up justice reinvestment to additional communities in NSW and beyond.

Authors

Gareth Bryant (Presenter), University of Sydney
Gareth Bryant is a Lecturer in Political Economy at The University of Sydney. His research explores financial modes of governing different areas of life. Gareth is the author of Carbon Markets in a Climate-Changing Capitalism (Cambridge University Press, 2019). His research has been published in a range of journals including Environment and Planning A: Economy and Space, Antipode, Energy Policy, the Annals of the American Association of Geographers and New Political Economy. Gareth was awarded the Global Network for Financial Geography (FINGEO) dissertation prize and the Australian International Political Economy Network (AIPEN) journal article prize.

Ben Spies-Butcher (Presenter), Macquarie University
Ben Spies-Butcher is Associate Professor and Head of the Sociology Department at Macquarie University. He has a PhD in Economics from the University of Sydney and his work focuses on the politics and economics of the welfare state. Ben is a Research Associate at the Retirement Policy and Research Centre at the University of Auckland. His most recent co-authored book is Market Society published by Cambridge University Press.