Consumer and Financial Literacy Taskforce, Australian Government, The Treasury.

 

The National Strategy for Consumer and Financial Literacy

The National Strategy for Consumer and Financial Literacy aims to develop an overarching national strategy to reduce poverty, increase economic opportunity, bolster national savings and create well-informed consumers.

Improving financial skills and education for all Australians is the key to economic prosperity. The Government is committed to helping Australians save for their future and recognises that low levels of financial literacy act as a barrier to consumer awareness and informed participation in the financial system.

Overview

Consumer and Financial Literacy is the ability to make informed judgements and effective decisions about the use and management of money. It is a vital skill for all Australians.

Recent research shows some groups have particularly low consumer and financial literacy levels and that targeted approaches to equip them with the appropriate financial skills, knowledge and information ensures they are better placed to make informed decisions and will be less vulnerable to scams, rorts and having an unmanageable level of debt.

Regardless of individual circumstance, closing the gaps in financial knowledge and assisting Australians to better manage their money has the capacity to enhance the lives and opportunities of all Australians.

At all stages of life – from a small child’s first bank account to the retirement savings of an ageing Australian population - a better understanding of how to manage money is critical to an improved savings culture.

There is an onus on policy makers, financial institutions and advisers to educate the Australian public about the increasingly complicated market place and to equip them with the skills to take control of their financial future.

Although a diverse range of consumer and financial literacy programs already exist, the Australian Government recognises there is a need for an overarching, national approach to consumer and financial literacy.

The Australian Government has established a National Consumer and Financial Literacy Taskforce (the Taskforce) to map and evaluate current consumer and financial literacy programs in Australia, to identify any gaps or ways of working more effectively and to develop a National Strategy to raise the levels of consumer and financial literacy in Australia.

Terms of Reference:

  1. The 15 member Taskforce will be Chaired by Paul Clitheroe and includes people who are leaders in their field and who can bring a broad perspective to the Taskforce, while balancing the interests of industry, government, consumer and community groups.
  2. The Taskforce will release a Discussion Paper for public consultation by May 2004 that maps and evaluates existing consumer and financial literacy information and programs in Australia and the services provided by the public, private and community sector.
  3. The Taskforce will consult relevant stakeholders and have regard to suggested approaches to consumer and financial information provision already published in policy papers, research reports, investigative articles and public statements.
  4. The Taskforce’s final report is to be delivered by August 2004 and will make recommendations for a National Strategy for Consumer and Financial Literacy. The National Strategy objectives are outlined in Attachment A.
  5. In evaluating current consumer and financial literacy programs and services, the Taskforce will consider:
    • The current availability and adequacy of financial education and information in schools;
    • The availability of financial information in the broader community, especially the capacity of Australians to understand and manage credit risk;
    • The availability of financial information and education to maximise superannuation and retirement savings;
    • The extent to which the foundation skills of current low-skilled adults and the mature-aged can be improved;
    • Enhancing awareness of the importance of saving and better communicating the need for a focus on retirement savings;
    • Any gaps or overlap in the current provision of financial literacy and consumer education programs by public, private and community sector organisations;
    • The linkages between public, private and community sector organisations in providing financial information and products and the contribution of key financial stakeholders;
    • The variety of multi-media and traditional communication tools used to disseminate messages and information about consumer and financial literacy;
    • The level of interest and motivation from consumers to seek out information about consumer and financial literacy.
  6. In addition to these responsibilities, the Taskforce may consider any immediate actions to streamline, improve, or augment current consumer and financial education initiatives where these actions have received widespread support from key stakeholders and where these actions can be fully met within existing organisational funds.

Attachment A

National Strategy Objectives

  • To clarify the roles and responsibilities of the various public, private and community sector organisations delivering consumer and financial information and education. The National Strategy should provide an assessment of the current availability and effectiveness of suitable programs.
  • To facilitate a national approach to the provision of consumer and financial literacy programs and information. The National Strategy should establish the means for organisations involved in consumer and financial information provision to work together on joint or individual initiatives in nationally consistent ways.
  • Foster best practice. The National Strategy should identify best practice principles for consumer and financial information and education provision based on successful domestic and international approaches.
  • Identify areas of priority. The National Strategy should provide focus for organisations involved in consumer and financial literacy and dissemination of consumer and financial information by identifying areas of priority.
  • Ensure effective implementation. The National Strategy should ensure any recommendations have ongoing support (both in a policy and financial sense) from key stakeholders. The National Strategy should engender ownership by appropriate stakeholders and ensure appropriate targets are met.

Contact the Taskforce

The Australian Government has established the Financial Literacy Foundation which is building on the work of the Taskforce. Please visit the Foundation at www.understandingmoney.gov.au.