Funding to provide more financial counselling falls short as industry dithers

Telcos, non-bank lenders and the buy now, pay later sector are refusing to contribute to industry-funded financial counselling support.

Social Services Minister Amanda Rishworth this week wrote to organisations yet to commit urging them to meet the August deadline. Picture: NCA NewsWire / Martin Ollman

An August 31 deadline for industry contributions to put more counsellors on the ground to support Australians in financial strife is set to pass without commitments from non-bank lenders, most telecommunications providers and the buy now, pay later ­sector.

While banks, insurers, the gambling industry, energy retailers and Telstra have kicked in around $9.6m to deliver more fin­ancial counselling services for Australians experiencing hardship, it is just over half the $18m in industry support sought from the government to bolster much-needed capacity.

Peak body Financial Counselling Australia said it was “deeply disappointed” that big telcos like Optus, TPG Telecom and Aussie Broadband, as well as finance companies like Pepper Money and Latitude Financial Services, weren’t willing to participate.

FCA chief executive Fiona Guth­rie said the amount of funding requested from those refusing to contribute was “a pittance”.

Financial Counselling Australia’s chief executive Fiona Guthrie

“The irony is these companies say they care about their customers, but when it comes to putting money where their mouth is, they go missing in action,” she said.

The Albanese government, which funds financial counselling services to the tune of $50m a year, is understood to be frustrated with the non-contributing sectors despite months of negotiations, and may consider mandatory contributions in the future.

It is understood Social Services Minister Amanda Rishworth this week wrote to organisations yet to commit urging them to meet the August deadline.

Ms Rishworth told The Australian it was her “expectation that those who haven’t signed up will do so”.

“Australians have been waiting a long time for an industry-funded financial counselling model and with more people experiencing financial distress, it’s needed now more than ever,” she said.

More than 300,000 people a year are provided with support and advice through financial counselling services, but demand is outstripping supply.

An industry levy to put financial counselling on a sustainable footing was floated in the final report of the Hayne banking royal commission in 2019.

In May, Ms Rishworth called for contributions from a range of industry sectors, including banking, finance, gambling, telecommunications and utilities.

The Australian Banking Association has committed to more than $6m in funding, the gambling industry $1.4m, the Aus­tralian Electricity Council $1.3m and insurers $600,000.

Telstra, which is acting independently of industry lobby group the Communications Alliance, has also offered an undisclosed amount.

The non-banking sector, which was asked for $2.75m, has not agreed, but a large player is understood to be close to breaking ranks and providing funding under its own name.

The telcos are yet to commit to the $1.3m they were asked for.

The Communications Alliance was contacted for comment.