Australia performed above the OECD average in an international assessment of young people's financial literacy, ranking equal fifth out of the 15 participating countries and economies.
Released by the OECD as part of its Programme for International Student Assessment (PISA) 2015, the study evaluated the financial literacy of 15 year olds from 15 countries, and their ability to understand and apply their knowledge to financial questions.
ASIC Deputy Chair Peter Kell noted that while Australia performed well, there is still work to be done.
'We welcome these results, which show that Australian students' average financial literacy ability compares well to the other countries that participated in the assessment. Encouragingly, 15 per cent of Australian students were high performers (above the OECD average of 12 percent)', said Mr Kell.
'That said, 20 per cent of Australian students were low performers. While this is better than the OECD average of 22 per cent, it indicates that there is more to be done in Australia to build financial literacy and capability at all levels of education.'
'In an increasingly cashless society, it's more important than ever that Australian students have the capacity to budget and manage their money through key life transitions such as their first job, starting university and moving out of home.'
Mr Kell also pointed to the important role that ASIC's Money Smart Teaching Program has to play. ASIC's MoneySmart Teaching program is the Australian Government's national financial education program working across the formal education sector to support the development of greater financial capabilities in young Australians, in partnership with state and territory education departments.
'One of our key tools in this area is ASIC's MoneySmart Teaching Program which ASIC has been collaborating with states and territories to roll out to schools since 2012. An independent impact evaluation[1] shows that the Program's focus on supporting teachers through professional development and quality classroom education resources is having a positive effect on teachers' ability and confidence to deliver financial literacy education. This in turn is having a positive impact on student outcomes.'
MoneySmart Teaching tools and resources include 36 units of work aligned to the Australian Curriculum for Primary and Secondary schools, 16 hours of teaching professional learning modules and 83 digital resources. The latest MoneySmart Teaching resource, launched in March 2017, is Knowing Growing Showing, which supports teachers to deliver authentic and meaningful learning for Indigenous students.
'There is something for everyone on the MoneySmart website, including teaching resources. All schools can benefit from the free resources and I would encourage everyone to find out if the schools in their communities are 'MoneySmart'.
ASIC's MoneySmart Teaching resources are available online at moneysmart.gov.au and material on the PISA results is available here.
Further information about the PISA study as well as the Australian National Report produced by the Australian Council for Educational Research (ACER), PISA 2015: Financial literacy in Australia, is also available on the ACER website.
Background: PISA 2015 Financial Literacy assessment
The PISA 2012 Financial Literacy assessment was the first large scale international study to assess the financial literacy, learned in and outside of school, of 15 year olds. In the study, financial literacy is defined as:
… knowledge and understanding of financial concepts and risks, and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve the financial well-being of individuals and society, and to enable participation in economic life.
For a full explanation, see the PISA 2015 Assessment and Analytical Framework, p.85.
This is the second time that financial literacy has been part of the OECD's PISA, a triennial international survey which tests the skills and knowledge of 15 year olds from countries and economies across the world. Details of Australia's 2012 results are available from the 2014 media release (14-162MR Australian students score well in PISA financial literacy test but more to be done: ASIC).
Students from fifteen countries and economies participated in the assessment of financial literacy, including 10 OECD countries and economies (Australia, the Flemish community of Belgium, seven provinces of Canada, Chile, Italy, the Netherlands, Poland, the Slovak Republic, Spain, and the United States), and five partner countries and economies (Brazil, four provinces of China, Lithuania, Peru and the Russian Federation).
Internationally around 53,000 students participated in the financial literacy assessment in PISA 2015, with around 14,530 students participating in Australia.
Some of the study findings relating to Australian students' performance include:
- Australian students achieved an aggregate score (504) that was significantly higher than the OECD average (489);
- Australia's proportion of high performers (15 per cent) was higher than the OECD average (12 per cent), and our proportion of low performers (20 per cent) was lower than the OECD average (22 per cent);
- Australian female students (with a mean score of 510 points) performed significantly higher than Australian male students (with a mean score of 498 points);
- The mean financial literacy score for Indigenous students was 411 points, significantly lower than the OECD average (489 points) and also significantly lower than non-Indigenous Australian students (508 points);
- Twelve per cent of the variance in student achievement in Australia is explained by socioeconomic background, which is higher than the OECD average of 10 per cent;
- In Australia 79 per cent of students have a bank account, and more than eight in ten students (84 per cent) discuss money matters with their parents at least once a month.
As the Australian Government agency responsible for financial literacy, ASIC facilitated Australia's participation in the PISA 2015 Financial Literacy assessment. The research was conducted by ACER.
Background: ASIC's MoneySmart Teaching program
ASIC's MoneySmart Teaching program builds teacher capability through professional development and classroom resources. Between 2012 and 2017:
- More than 6,000 schools accessed MoneySmart Teaching resources;
- More than 30,000 teachers undertook MoneySmart Teaching professional development ;
- Evaluation indicates that students engaged with the MoneySmart Teaching program show higher financial literacy, and 90% of teachers using the program report increased capacity to teach financial literacy.
In the 2017-18 Budget the Government provided additional funding of $16.0 million to ASIC over four years from 2017-18 to broaden ASIC's financial literacy program. A component of this additional funding will be used for ASIC's MoneySmart Teaching Program.
[1] Independent Evaluation of ASIC's MoneySmart Teaching program 2013 – 2017, EY Sweeney available July 2017.