Thanks very much Reverend Dr Keith Garner, CEO of Wesley Mission. Can I also acknowledge Lyn Brailey, who is a financial counsellor with Wesley, and also a special mention to Bronwyn Rushton, who is one of the stars of the report and was also featured in the Sydney Morning Herald today. Bronwyn happens to be a constituent of mine, living in my electorate in Western Sydney, and I have previously met her and her daughter, who I should also acknowledge has been leading the local campaign for Make Poverty History.
Can I begin by saying that one of the things that inevitably comes up as a point of discussion when we talk about financial stress is the question of responsibility. I heard Keith interviewed on the radio this morning and this whole question of responsibility was central to the discussion. On the one hand there were people saying that it’s the responsibility of banks and others to not lend money, then on the other it was argued that it’s the responsibility of the individual to manage their finances.
I think we can sometimes get into this debate about responsibility when the reality is we are all responsible for our financial health. As individuals we are responsible; as consumers we’re responsible; as advocates and policy makers we’re responsible for having laws in place that mitigate against some of those risks that consumers face; those that lend money have a responsibility to their community and to those to whom they lend that money; and as parents and teachers we all have a responsibility to encourage a greater sense of understanding of financial literacy amongst our children and students. The question of financial stress is one we all have to accept some responsibility for.
Perhaps the best example of what this report has to say about financial stress is the question of the comparison that is made between financial health and physical health. It’s important that we should increasingly see our financial health in the same terms as we see our physical health. Just as with our physical health we know that a balanced diet and an exercise regime is important, so too, when it comes to our financial health, having a good budget and sticking to it is something that is really important.
One of the themes that comes out strongly in the report is the fact that when people do seek assistance from organisations like Wesley Mission, and I want to take the opportunity to congratulate Wesley Mission on the outstanding work that they do, there are some barriers to people accessing financial counselling. One of those barriers, and perhaps the biggest barrier according to the data in this report, is that many people don’t feel comfortable sharing their personal financial arrangements with a stranger, and that’s an important consideration that we have to overcome. But if we think about the comparison between financial health and physical health, in a sense going to a financial counsellor is no different to going along to see a GP when you’ve identified a health problem. In the same way as going to see your GP, the sooner you report some of the difficulties you’ve been having, the much better chance you’ve got of getting those issues under control before they become a problem. The same applies to financial stress and a person’s financial circumstances. Where people are finding they’re starting to have some difficulties, the sooner they’re able to go along and see someone the much higher chance of getting a positive outcome and being able to get on top of some of those issues.
The first barrier that we’ve seen is people not being comfortable in talking to others. The second barrier is that there is a perception that it would cost too much. This is a perception that we have to tackle because in the case of many of the services that Wesley provides, they are actually free of charge, so that perception needs to be countered. There are some good services out there – I agree that we could always do with more of those services – but we do have some very good services out there that are not being accessed because people perceive that it will cost too much.
The other barrier that has been raised is that people do not know where to go when it comes to accessing financial counselling services. This is an area where we can all accept some responsibility in making more people aware of where they can go to seek out assistance, so that when they start to find they have some financial difficulties that they’re able to go and obtain the assistance they need as soon as possible so that they can tackle the issues they are facing with the support of counselling services like Wesley Mission.
These are three examples of where there are barriers to people accessing the services they need that we can all play a role in reducing those barriers, and that’s something the Government is very much committed to doing.
One of the important points that comes out of this report is the need to provide information across the lifecycle. This is important, and this is something we are very much taking on board, and in the coming period we’ll be releasing a revised website that ASIC has been putting together. ASIC has been undertaking some fantastic work in presenting relevant information to people as far as financial literacy is concerned. This website will address some of those key lifespan issues, those important life decisions, such as when you get your first mobile phone, when you move into your first rental property, when you take out your first home loan, when you get married, when you have your first child, and when you go to retire. Right across the lifecycle there will be opportunities for people to access relevant information that allows them to deal with the challenges they face in managing their own finances.
On that particular point, I know that Keith mentioned in his comments that the Government has committed to ensuring that financial literacy is part of the National Curriculum.
I want to take this opportunity to thank Wesley Mission for their advocacy on this point. This is something they have been campaigning for and something the Government has committed to doing.
We think that, particularly with young people, there is a real opportunity to use our schools and the curriculum to give young people more information so that they can make more informed decisions. The younger generation have access to more information than any generation in history. They are savvy when it comes to using all manner of technological devices, but in so many ways, when it comes to managing their finances, they’ve still got such a long way to go. That’s why we think it’s important that financial literacy information be provided in a relevant way and that’s something we’ll see a little bit more of as part of the upcoming release of the ASIC website.
Before I conclude can I say what a pleasure it is to be here. I’m really here in two capacities- I’m here as a local Member who has always taken a keen interest in these matters, and I note that my electorate falls within the region identified as being where there are the largest number of incidences of financial stress. I’m also here as Parliamentary Secretary to the Treasurer and one of my particular responsibilities is around this issue of financial literacy. I know there was some discussion today about ensuring that we have specific warnings when it comes to credit cards and many of those issues will be dealt with by my colleague Bill Shorten, who is the Minister for Financial Services, as part of the consumer credit reforms, and we’re moving into the second phase of those reforms. In the same way as when we think about smoking and the warnings that appear on cigarette packets, so much of the work in taking up the campaign against smoking has been about educating people before they get to the store and purchase a packet of cigarettes. In the same way, I think the issue of financial literacy is front and centre of what we need to do as a community to ensure that we tackle issues of financial stress. Giving people the knowledge and the information to understand how to manage their budget and work through financial challenges is something that will not only empower consumers but will, over time, reduce the incidences of financial stress that this report so accurately sets out.
Thank you very much for the opportunity to be here. Once again I congratulate Wesley Mission for their outstanding work and for once again presenting a report that provides a very accurate snapshot of some of the challenges that we’re all facing out in the community.