In the age of heavily marketed mobile phone services and a booming use of broadband internet it is important that young Australians are educated on how to avoid being swamped with debt, Assistant Treasurer, Peter Dutton, said today.
“These days, you don’t have to watch more than a few minutes of television before you’re greeted by a ‘crazy frog’ or ‘dancing dragon’ singing the latest Top 40 track. With more and more young people using mobile phones, there is significant peer-pressure to have the most unique ring-tone or the latest phone-game – all of which can be downloaded for a small fee,” Mr Dutton said.
“The problem is these fees combined with regular text and call charges can really start to add up. For young people, getting into a debt spiral can have a serious impact as they get older – a bad credit rating would be a heavy burden for a young person trying to get a loan for a car or house,” he said.
Last week in the Senate, the Government highlighted a new industry code to protect vulnerable Australians, particularly young people, from getting into financial difficulties with mobile phone and internet services. This included mandatory credit checks and the offer of limited services for those people who were at risk of falling into heavy debt.
“As well as an industry code for new mobile phone an internet users, the Government is committed to addressing one of the causes of debt amongst young Australians - a basic lack of financial literacy.”
The Government launched the Financial Literacy Foundation in June 2005 to assist all Australians increase their financial knowledge and better manage their money.
Since then, the Foundation has worked with the States and Territories to develop national standards to be adopted for years 3, 5, 7 and 9, to make sure all school children get an understanding of how to responsibly handle money.
“This is the first time a Federal Government has driven a campaign encompassing all States and Territories, to help young children understand the importance of being responsible with their money,” Mr Dutton said.
“This is an investment in the future of school children, helping them learn from an early age how to employ simple strategies to avoid getting over their heads in debt. It’s about instilling young Australians with a good pattern of behaviour when it comes to managing their own money.”
“In addition, the Government will be providing resources for school teachers, to help them in teaching financial literacy to children,” he said.
The Foundation will also work with employers and other stakeholders to increase access to financial literacy education for young people in the workplace.
“A good example is the partnership with the Master Builders Association (MBA) who are implementing a pilot programme in the ACT this year which aims to introduce financial literacy training to cadets and apprentices.”
The Government will also embark on an awareness campaign later this year, designed to raise awareness of financial literacy issues among the wider community.
This will include an information campaign and a dedicated website designed to informing consumers of financial literacy issues and highlight organisations that can help provide further education.
“This is a responsible plan by a Government that is leading the way in helping Australians develop good attitudes toward managing their money and safe-guarding their financial futures,” Mr Dutton said.