Today ASIC launched the new National Financial Literacy Strategy 2014–17 (Strategy).

The new Strategy aims to improve the financial literacy of all Australians by providing a national framework for action for stakeholders across the government, business, community and education sectors, led and coordinated by ASIC, the Australian Government agency responsible for financial literacy.

Over the last 12 months, ASIC led a comprehensive consultation process with over 200 stakeholders, to shape the new Strategy and identify the key priorities for action. In addition to the feedback and views gathered from stakeholders, the new Strategy is informed by relevant consumer and investor research, including insights from behavioural economics and the experiences of other countries around the world.

Launching the new Strategy, Parliamentary Secretary to the Treasurer, The Hon Mr Steven Ciobo MP said, 'With almost every Australian owning one or more financial products, improved financial literacy can benefit anyone, regardless of age or income, in terms of having greater understanding of financial matters and the ability to meet financial goals for the future.'

'Being able to make the most of your money, manage financial risks and avoid financial pitfalls can have a positive impact on the financial wellbeing of individuals, families and communities.'

ASIC Chairman Greg Medcraft noted ASIC has a strategic priority to promote confident and informed consumers and investors in the financial system, whether they are taking out a home loan, planning for their retirement or investing in the market.

'Promoting greater financial literacy is key to ASIC's strategic priority,' Mr Medcraft said.

Under the Strategy, ASIC will continue to enhance its popular MoneySmart website for consumers and investors and reach more schools through its MoneySmart Teaching program, designed to promote and support financial literacy for schools.

'Over 400,000 Australians already benefit from visiting ASIC's MoneySmart website each month to access free and impartial tools and resources to help them make their financial decisions,' Mr Medcraft said.

Chairman of the Australian Government Financial Literacy Board, Paul Clitheroe, said, 'Being good with money can improve our lives and the lives of those we love. As the saying goes, an ounce of prevention is worth a pound of cure.'

'Educating the next generation to be MoneySmart is a key part of the National Strategy. With over 80% of Australian 15 year olds having a bank account,[1] and about 90% of teenagers with a mobile phone,[2] learning good financial skills and habits from an early age can make a difference throughout life.'

ASIC welcomes the commitment of many organisations across all these sectors to the delivery of financial literacy initiatives aligning with the priorities set out in the Strategy. ASIC will liaise with relevant stakeholders on the implementation of the 2014-17 Strategy and will report regularly on progress.

Background

Financial literacy is about having the knowledge, skills, attitudes and behaviours necessary to make sound financial decisions, based on personal circumstances, to improve financial wellbeing.[3] It is considered by many as a ‘core life skill for participating in modern society’.[4]

According to the most recent ANZ Survey of Adult Financial Literacy in Australia, Australians have varying levels of financial knowledge and proficiency in that they perform well on some aspects of financial literacy but poorly on others. For example, the survey found that:

one-third (36%) of Australians found dealing with money stressful, even when things are going well one-third (33%) found their superannuation statements difficult or very difficult to understand one-quarter (27%) were likely to consider the level of cover when renewing an insurance policy, and three-quarters (73%) had not identified how much they would need to live on when they retire.[5]

The ANZ survey also found identified groups in the population where lower levels of financial literacy are more likely to be encountered, including: young people (under 25 years); people with no formal post-secondary education; people with relatively low levels of income and assets; those working in lower blue collar occupations; and females.

The National Financial Literacy Strategy 2014–17 provides an overarching framework to guide and encourage all agencies and organisations committed to improving the financial literacy of all Australians. As the Australian Government agency responsible for financial literacy, ASIC will lead and coordinate efforts under the Strategy. The Strategy is overseen and supported by the Australian Government Financial Literacy Board, which is chaired by Mr Paul Clitheroe AM, and which provides high-level advice to ASIC.

The strategic priorities set out in the National Financial Literacy Strategy 2014–17 are to:

educate the next generation, particularly through the formal education system increase the use of free, impartial information, tools and resources provide quality targeted guidance and support strengthen co-ordination and effective partnerships, and improve research, measurements and evaluation.

The National Financial Literacy Strategy 2014–17 is accompanied by an Action Plan that describes indicative actions for ASIC and other relevant stakeholders, under the five strategic priorities.

Organisations involved in the delivery of financial literacy initiatives in support of the Strategy are listed at the dedicated National Financial Literacy Strategy website. The Strategy builds on the foundations of the first National Financial Literacy Strategy, published by ASIC in 2011.

[1] S Thomson, Financing the future: Australian students' results in the PISA 2012 financial literacy Assessment, report, ACER, July 2014

[2] ACMA, Aussie Teens Online, online content, ACMA, July 2014, http://www.acma.gov.au/theACMA/engage-blogs/engage-blogs/Research-snapshots/Aussie-teens-online

[3] Page 6, National Financial Literacy Strategy 2014-17

[4] OECD, Financial Education in Schools, online content, OECD, 2014, http://www.oecd.org/finance/financial-education/financialeducationinschools.htm

[5] ANZ, ANZ survey of adult financial literacy in Australia, The Social Research Centre, ANZ, 2011, www.financialliteracy.gov.au/research