Media release: Commission of Audit recommendation to cut funding for financial counselling fails struggling families
Thousands of Victorian working families, pensioners and those in financial hardship will be the biggest losers if the Federal Government adopts yesterday’s Commission of Audit recommendation to cut funding for financial counselling.
‘Financial counselling provides economic benefits far beyond its client base. Research from Adelaide University found that every dollar invested in financial counselling saves the economy five – a good rate of return by any measure[1],’ said Peter Gartlan, Executive Director of The Financial and Consumer Rights Council.
‘This is why we’re stunned at the Commission’s recommendations – financial counselling can change lives and saves money for the economy.’
Financial counsellors provide free and independent advice and support to over 40,000 cash strapped Victorians every year. Mr Gartlan said this advice has positive effects on clients’ financial, physical and mental health.
‘The numbers are compelling: 60 percent of clients have their financial difficulties resolved, 63 percent feel their mental and emotional wellbeing is improved, and 45 percent feel physically healthier,[2]’ said Mr Gartlan.
‘Denying access to free and independent advice and advocacy will plunge vulnerable Victorians into increasing poverty and debt. The suffering will be felt in the bush too, already battered by floods, fire, and drought. The rural financial counselling service has also been earmarked to be abolished.’
Victoria receives approximately $4.5 million of Federal Government funding, in addition to the $7 million of State Government funding. Both state and federal funding recognises that financial counselling is a shared responsibility. Without Federal funding, we will see:
- the closure of the national financial counselling helpline 1800 007 007;[3]
- the complete closure of Commonwealth-funded services;
- a massive blow out in waiting lists; and
- those already faced with job loss, sickness, hospitalisation, and family crises will essentially be abandoned to fend for themselves in the face of utilities disconnection, hunger, and debt.
‘Defunding the program benefits nobody – not consumers, not government, not the economy. Quite simply, financial counselling saves the government much more money than it costs,’ said Mr Gartlan.
At present, anyone who is in financial difficulty can still contact a free and independent financial counsellor on 1800 007 007 or visit www.moneyhelp.org.au.
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For further comment please contact: Peter Gartlan, Financial and Consumer Rights Council: 0457 700 028
[1] Paying it Forward: Cost benefit analysis of the Wyatt Trust funded financial counselling services, Parvin Mahmoudi, Ann-Louise Hordacre and John Spoehr, The University of Adelaide, 2014.
[2] I Wish I’d Known Sooner, Dr Nicola Brackertz, Swinburne University, The Salvation Army, 2012.
[3] Victorian callers would still have access to the 1800 007 007 service via the Victorian Government funded MoneyHelp service.
