NFP sector to play key role in financial counselling initiative
Posted on 21 Nov 2023
By Greg Thom, journalist, Institute of Community Directors Australia
The federal government will spend $1.5 million to establish an independent not-for-profit body to collect and distribute millions of dollars in additional funding for financial counselling services to help disadvantaged Australians.
More than $30 million is expected to be raised under a new voluntary commitment from the private sector over the next three years.
Industries ranging from banking to insurance and online gambling have worked with Canberra to establish the funding model for financial counselling.
The initiative is designed to ensure increased access to financial counselling services for Australians amid an unprecedented cost-of-living crisis.
The move follows the delivery of a co-signed letter to Victorian Premier Jacinta Allan last month from 36 charities and community organisations – including Financial Counselling Australia – urging more help for people struggling to access financial advice.
The government said more than 125,000 people are helped face to face by financial counsellors each year, while 130,000 calls are made to the National Debt Helpline.
The extra funding from the private sector is in addition to more than $50 million spent each year by the federal government on financial counselling services and $30 million contributed by the states.
The new industry funding model was welcomed by Financial Counselling Australia (FCA), which will take the lead in establishing the new body.
FCA CEO Fiona Guthrie said the sector had been waiting a long time for an industry funding model to help deliver more access to financial advice for those who need it most.
“We thank the industries and companies involved in the financial counselling industry funding model for their contributions,” she said.
“It is a tangible demonstration of their commitment to supporting their customers who are doing it tough.”
Organisations that have signed up to the new industry initiative include the Australian Banking Association, the Energy Council, Tabcorp, Afterpay, the Insurance Council of Australia and Telstra.
“Industry funding for financial counselling is a game-changer and will see thousands more Australians able to access the support they need when they’re doing it tough,” said Ms Guthrie.
“Industry funding for financial counselling is a game-changer and will see thousands more Australians able to access the support they need when they’re doing it tough.”
The industry funding model was established in response to the Sylvan review of the coordination and funding of financial counselling services, which was in turn sparked by the Hayne Banking Royal Commission.
The Sylvan review identified that funding was the biggest roadblock preventing more financially stressed Australians from accessing financial counselling.
A key recommendation of the review was that industry bodies should contribute funding to address unmet demand for financial counselling help.
The federal Minister for Social Services, Amanda Rishworth, said the new funding approach was aimed at not only improving access to financial counselling services but also sharing responsibility.
“It has been designed to receive and distribute funding contributions from industries that contribute to demand for financial counselling, and benefit from these services,” she said.
Ms Rishworth said an additional $1.5 million from industry was expected to be added to the fund by the end of the year, as more organisations come on board.
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