MADONNA KING:
Would you listen to your five-year-old's advice on paying off your credit card or ask your 10-year-old to choose the best deal on a mobile phone plan? You might be able to do that soon under a push to teach financial literacy in our schools. Students from Kindergarten to Year 10 will study basic budgeting, banking, credit cards and mobile phone plans. Nick Sherry is the Minister for Superannuation and Corporate Law. Good morning.
NICK SHERRY:
Good morning, good morning to your listeners.
MADONNA KING:
Why do our five-year-olds need to be taught how to draw up a budget?
NICK SHERRY:
Well if you look at the financial world today for young people, it is much more complex than say 20 years ago and the level of decisions around such things as mobile phone plans, credit card use, and basic budgeting are much more complex. Therefore, the Rudd Labor Government believes that at least in some basic way with basic budgeting and some basic information on financial services, we need to incorporate more of that into the school curriculum.
MADONNA KING:
So what kind of things will our young children learn to do?
NICK SHERRY:
Well what will happen is that the financial literacy advisory board has produced a package of support materials for teachers that they can then use and that can be as basic as if you receive five dollars a week pocket money, how you would go about saving that and how you would go about spending it. Quite simple concepts around basic budgeting and then moving into areas such as the cost of mobile phone plans, and how you would pay for that, credit cards and the cost of interest.
MADONNA KING:
This brings up that debate about what's the role of a teacher and what's the role of a parent. Teachers are saying they have enough on their plates, the curriculum is already crammed, why should they have to show children how to budget for a mobile phone? What do you say to that? That is, should it be the job of a parent?
NICK SHERRY:
Well I think it is the job for both. I'm a parent and I think it up to me to attempt to teach my kids basic financial literacy and budgeting and the important issues around life and functioning in a society. But I also think there is a role for teaching some of the basics in the schools. I think that is an important part of a good education. The good thing yesterday at the launch in Canberra was that we had a group of very enthusiastic teachers and educators from all Australian states and territories who are keen to incorporate basic concepts around learning money skills as part of the overall school curriculum.
MADONNA KING:
You have also just announced Federal regulation of the finance services sector, in terms of doing more about property spruikers, reverse mortgages and debenture products which are all being look at. How broad is this?
NICK SHERRY:
Well what I also announced yesterday was that we have a national economy and a national financial services economy and that in some areas, some important areas, the state and the territories, some eight jurisdictions, still attempt to regulate in these areas. In today's modern world it is impractical for them to do so. You need a single standard national law in respect to financial services and financial products.
MADONNA KING:
I'm trying to be specific. What is the biggest area of complaint? Is it reverse mortgages aimed at the elderly, is it property spruikers, what is it?
NICK SHERRY:
I think it is both of those actually. It is property spruiking and attempts to sell property involving investment and loan-type instruments, I think that is a major area of complaint. I also think the recent work by the regulator ASIC shows that there's a growing problem with what are called reverse mortgages, particularly targeting the elderly. They're two areas where we are very keen to have simple, standard and effective regulation at a national level.
MADONNA KING:
Senator Sherry thank you.
NICK SHERRY:
Thank you.
MADONNA KING:
That was Nick Sherry, the Minister for Superannuation and Corporate Law.