The two life-changing words no one’s saying this election

Financial literacy. They are two dull, non-headline-making words, and in all the territory covered by the party leaders since this election campaign began, they have not once been uttered.

Since 2016, there has been no improvement in Australians’ financial literacy across any age group, according to the Programme for International Student Assessment study.

Non-explicit money concepts have been in the curriculum since 2011 in subjects such as English and science.Credit: Joe Armao

Meanwhile, it’s widely accepted that low financial literacy is life-limiting; it does everything from increasing the stress from the cost-of-living crisis to decreasing someone’s chances of being able to use first home buyer schemes.

But the fact is that unlike 70 countries around the world that recognise it as not just life-changing but nation-changing, Australia no longer has a national financial capability strategy. And this seems to have been the result of interdepartmental argy-bargy.

Because we used to. In 2022, policy responsibility for our money smarts was transferred from the Australian Securities and Investments Commission – presumably as a rebuke – to Treasury. From that point, the impetus and emphasis just disappeared.

Financial literacy used to be – rightly – a massive deal. On the back of my work as a financial educator, I have MC-ed multiple parliamentary breakfasts at Canberra Parliament House, featuring the financial services minister and Reserve Bank governor, updating our politicians on the progress.

An urgent plea to the leaders of both parties: re-activate and re-focus the National Financial Capability Strategy, for all our sakes.

Financial literacy also used to have not just appropriate fanfare but also bilateral funding and support.

I note that the ATO has secured the most recent classroom cut-through with its Tax, Super and You high school resource and competition, of which I have been guest judge. For more than a decade, ASIC’s moneysmart.gov.au has carried lesson plans for teachers.

But official talk or action on money smarts has virtually disappeared. And here’s the thing: that transference of responsibility from ASIC to Treasury occurred at almost the same time as ASIC kicked banks out of schools.

I lobbied for and fully supported that: education by commercial-branded entities is not OK, but it has compounded the void. And it has fallen to not-for-profit organisations like the Ecstra Foundation to try to reach as many students with the responsible money message as possible.

Sure, money concepts have been embedded in the Australian curriculum since 2011, across subjects you wouldn’t expect, such as English and science.

But the idea is that it’s not explicit, so your children will never come home and say “we studied financial literacy at school today”. And it is still possible to weave a wonderful path through school and entirely miss any of the personal finance tuition.

What’s more, it is in the Australian curriculum only until year 10, unless you study lower-level maths.

Given it’s such a vital life skill and our national prowess is so mediocre versus other OECD countries, it seems explicit teaching within a dedicated and mandatory subject would have been the way to go. At the very least it needs to be given a higher priority.

A Grattan Report study that surveyed almost 2000 teachers and leaders in primary schools has pointed to huge and early maths anxiety, even among the teachers: 28 per cent of primary teachers said they would not feel confident at the upper primary school teaching level.

And it seems teachers don’t agree on the best ways to teach maths: 46 per cent say there isn’t a consensus at their school, let alone how to tackle money smarts.

The companion problem is that early maths anxiety in students can swiftly become money anxiety in adulthood. It’s budgeting, making purchasing decisions, paying taxes, sorting your super, or perhaps launching and running a small business.

So the apparent recent decrease in political support for financial literacy, or what is now more appropriately called financial capability, is concerning on many levels.

First, my urgent update to parents: without a renewed governmental focus, and fast, we need to step up. Few of us have realised we are the main and possibly the only source of economic intel.

We need to not just deliver but also to model those concepts key to financial success: spend less than you earn, target goals so sweet you can taste them and delay gratification for a richer pay-off are principal among them.

But second: an urgent plea to the leaders of both parties: re-activate and re-focus the National Financial Capability Strategy, for all our sakes.

Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at www.nicolessmartmoney.com. Follow Nicole on Facebook, X and Instagram.

• Advice given is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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