Preliminary Recommendations to Government
31 August 2004
The Consumer and Financial Literacy Taskforce has developed a number of partial recommendations during the process of preparing a full report to Government. As significant time, effort and community support has already gone into the development of these recommendations, the Taskforce has decided to present these partial recommendations to Government ahead of its final report, which will now be delivered in the next term of Government.
These recommendations propose ways to build the capacity of Australian consumers to more effectively manage their money and are an important part to any long-term strategy to address consumer and financial literacy in Australia. As an indication of the importance of financial literacy to a person’s well-being, the Taskforce has modelled the effects of ‘bad’ decision making over the course of a person’s life and discovered that a person on a salary of $36,000 per annum stands to lose $790,000 in lost wealth over the course of their life.
Key Recommendation - establishment of a national financial literacy body
The Taskforce’s key recommendation is the establishment of a national financial literacy body as the means for taking forward a national strategy for improving consumer and financial literacy. The body would take a strategic approach to this issue and would work to facilitate improved cooperation, efficiency and effectiveness among provider organisations. It is proposed that the functions of the body would be as follows:
Consumer and financial education in schools
- It is proposed that the body would facilitate the adoption and integration of consumer and financial literacy into the school system. The strategic aim would be to embed consumer and financial education into the school curriculum, starting at primary school. The Taskforce is mindful of the challenges presented by an already crowded curriculum. The professional development of teachers in teaching consumer and financial education would also be strongly supported and promoted.
Financial education in the workplace
- The body would work toward the adoption and integration of consumer and financial literacy into the workplace through vocational education programs and employer information channels. Adult education would also be encouraged, and it is envisaged that existing networks could be leveraged to develop an appropriate strategy.
- The body would commission and conduct an ongoing national research program on the factors leading to key consumer and financial decision-making. This research would use an agreed framework such as the Consumer Behaviour Model as a basis and would seek to set benchmarks that could be measured over time.
- The body would provide a clearinghouse website to assist consumers and consumer intermediaries with better access to existing information. This site would be properly resourced to provide a high quality service and would serve as a one-stop-shop. It would be developed as a ‘hub’ or repository for the latest consumer and financial information and research.
Achieving cultural change
- The body would facilitate an ongoing social marketing campaign to embed a key consumer financial literacy message within the Australian culture (the financial equivalent of ‘slip, slop, slap’ or ‘don’t drink and drive’). The body would also provide best practice guidance to organisations on effective education approaches to key consumer issues based on research and policy expertise.
Award for excellence
- The body would be involved in the provision of an annual awards program for excellence in the field of consumer and financial literacy that would promote best practice and raise the awareness of key initiatives.
Fostering industry/government/community collaboration
- It is proposed that the body have a role in facilitating collaboration between organisations which might benefit from each others’ expertise and pooled resources. This would have the aim of reducing duplication and inconsistency across the plethora of existing initiatives and programs.
Consumer and Financial Literacy Taskforce