A shared responsibility

John Price outlines the foundation for improving financial literacy and the tools and resources available to assist all Australians.

As a company director and employer it is easy to recognise the benefits of having financially literate employees, including personal financial security, lower stress levels and enhanced productivity within the workplace. Financial literacy, which is about having the right knowledge, skills, attitudes and behaviours to make sound financial decisions, is regarded as a core life skill which must be fostered in order to navigate changing personal circumstances and rapidly evolving financial products and services.

In recent years there has been a global focus on improving financial literacy. In Australia, the Australian Securities and Investments Commission (ASIC) is responsible for financial literacy across the Australian Government and leads the development and implementation of the National Financial Literacy Strategy (NFLS). By providing Australians with the tools and resources to develop their financial literacy skills, ASIC can help reduce the incidence of poor consumer outcomes, support ASIC’s surveillance and enforcement work, and boost participation in the financial services and markets, with a positive flow-on effect to the broader economy.

The NFLS sets out a framework for ASIC and every other organisation to improve the financial literacy of Australians. It is promoted and supported by the Australian Government’s Financial Literacy Board, a non-statutory body chaired by Paul Clitheroe AM, which provides strategic advice to government and ASIC on financial literacy issues. The NFLS focuses on:

• Giving Australians access to impartial information, tools and ongoing support.
• Developing innovative solutions to drive improved financial wellbeing and behavioural change.
• Using formal educational pathways to build financial literacy.
• Working in partnership with the private sector, the education sector, community organisations and relevant government agencies.

A key deliverable under the NFLS is ASIC’s MoneySmart website, which was launched in 2011. The broad objective of the website is to initiate and support behavioural change in the way consumers of all ages, from students to retirees, think about and manage their finances.

This year, ASIC’s MoneySmart website is celebrating its fifth anniversary. The popularity and demand for its tools and resources can be seen by the increase in visits from around 110,000 at its launch to more than one million in April this year. The website offers a full suite of interactive tools, including financial calculators, a budget planner, retirement planner, mortgage calculator and innovative apps, such as TrackMySPEND and TrackMyGOALS, to assist consumers with their financial decision-making.

ASIC’s financial literacy work also involves partnerships with a growing number of organisations that are active and enthusiastic about financial literacy, including community and vocational education organisations and government bodies. These organisations use ASIC’s MoneySmart as a central hub for information on money matters and an independent source to share content with their employees, rather than building their own tools. We actively encourage businesses to engage with us and introduce ASIC’s MoneySmart tools to their employees.

We have also developed financial literacy units of competency in vocational education for apprentices and trainees, the small business owners of the future, and have helped other organisations including:

• Community organisations.
• Employers, such as the Australian Defence Force.
• Government agencies, such as the Australian Taxation Office.

An important component of our work is improving the financial literacy of the next generation. ASIC’s MoneySmart teaching program is aligned to the Australian school curriculum to help teach financial literacy. Since 2012, more than 14,000 teachers have completed our professional development programs and gained real strategies and quality resources to support their work within the classroom.

Improving financial literacy is a shared responsibility and we invite company directors and employers to sign up to support the NFLS. Working collaboratively, we can promote greater confidence and trust in the financial system.