Treasurer consults with Barefoot Investor and Eddie Woo to tackle debt

It’s vital advice that might not make you a billionaire – although it could — but it will help you stay off welfare and out of debt.

It might not make you a billionaire – although it could, but it will help you stay off welfare and out of debt.

At the very least, young people would leave school being able to save, manage finances and invest in the stockmarket under a financial literacy scheme being devised by Treasurer Dominic Perrottet.

Scott Pape working with Year 11 and 12 students at Victoria’s St. Columba's College in his money program in schools called Money Movement, Picture: Jay Town

Instead of relying on credit or welfare, young people would become more responsible for their own financial situation while having the tools to change it.

As Treasury conducts a review in to the financial capability and wellbeing in the community, it can be revealed Mr Perrottet has held meetings with Barefoot Investor Scott Pape and maths education guru Eddie Woo for advice on how such a scheme may be delivered.

With one in 10 NSW residents deemed to be in financial stress, Mr Perrottet said he wanted one of his legacies as Treasurer to be helping people change the financial situation.

In an interview last week, Mr Perrottet – who began working at the Pizza Hut at “14 years and nine months for $5 an hour” before selling buckets of chicken at KFC “and then a milkboy” – said the idea to devise a scheme after chatting to American billionaire – and chairman of JPMorgan Chase – Jamie Dimon two year ago.

“I asked him if he was in my shoes, what would he do,” Mr Perrottet said.

“He said he would bring in financial literacy in to schools.

“He pointed to how when the stockmarket increased in the early years of Obama, a lot of the working class were left behind by those who had a good education in financial literacy.”

Mr Perrottet said he had sought out meetings with Mr Pape, author of the nation’s best selling nonfiction book, and Mr Woo, who was awarded the Australia’s Local Hero Award for his popular online maths lessons, to work out a scheme that would have broad appeal.

He said he envisaged a final product that could be taught to both primary and high school aged children either in our outside of schools as well as a broader program to equip older people who struggle to manage their finances.

The importance of getting a job, saving and also giving to the needy would be critical elements in the scheme, he said.

“We want to educate people how to manage a budget, how to grow their wealth for their own families, for their kids,”

“I think we have drifted. People are readily able to access credit cards, Afterpay. We need to teach our kids the importance of saving, getting a job and also giving.”

Mr Perrottet, who has six children, said he offered pocket money in return for doing chores such as “loading the dishwasher” or “weeding”, while also encouraging them to use their savings to help people in need.

“I will work with the Education Minister (Sarah Mitchell) on how we may include financial literacy in schools,” he said.

“It should become basic knowledge. These are things that should put you in good stead for the rest of your life.”

NSW Treasurer Dominic Perrottet started working at Pizza Hut as a 14-year-old. Picture: AAP

Mr Perrottet said he hoped the scheme would benefit what he called the “forgotten areas” of society, where less well-off families struggled to break the cycle.

“This is where Treasury can play a role, not just managing State finances but also assisting people right across the State to help themselves,” he said.

“You can have a strong economy, but if people are falling through the cracks, it’s not a good thing.

“Labor sees itself as focusing on disadvantage, the Liberals can help people with personal responsibility in being able to stand on your own two feet.

“The economy we’ve got is a strong economy, but we want everyone to participate and benefit from that.”

The Treasury review will examine the financial health of the community with a view to assessing the need for improved programs of financial literacy to reduce the number of people who are categorised as either financially vulnerable or in severe financial stress.

The most indebted households are in Victoria and NSW.

Households in NSW owe almost double the household income.

Despite the lowest mortgage rates since the 1950s, the debt-servicing ratio for households is near its 2008 peak, back when the cash rate was 7.25 per cent

Mr Perrottet, who hopes to have further meetings with Mr Pape and Mr Woo, said managing personal finances was a key factor in social mobility.

“Both Scott and Eddie have raised the issue about how we bridge that knowledge gap when it comes to managing money,” he said.

Mr Pape, recently described Afterpay as the “financial equivalent of marijuana, said he welcomed the interest in governments to address financial education.

“I am passionate about financial education and adequately funding not-for-profit financial counsellors, which is what I do,” he said.

“And I think it’s really awesome that governments all around the country are taking this very seriously.”

Originally published as Treasurer consults with Barefoot Investor and Eddie Woo to tackle debt