"The government will always do its bit to meet these challenges but the private involvement and the community involvement in meeting these challenges also has to get bigger.

"It's not just about charity, it's about private sector investment in solving social challenges."

He said that investment in social services has to be a "good deal" for private investors, pointing to the success of social benefit bonds in NSW in which private investors have funded programs for vulnerable families and recidivist prisoners.

"We need welfare to be a good deal for the private sector if we want to expand the level of private sector investment in meeting social challenges," he said.

Mr Morrison said Australians could afford to be more philanthropic, with the government "cutting red tape" to encourage more charitable donations.