The Albanese Labor Government is partnering with industry stakeholders and the financial counselling sector to implement an innovative industry funding model to ensure increased access to financial counselling services for Australians.
Under the new Industry Funding Model for Financial Counselling, the Government has secured agreement for three-year funding commitments from industry, totalling around $30 million.
This is in addition to the almost $50 million per annum for financial counselling services that the Commonwealth provides, and around $30 million contributed annually from state and territory governments.
Approximately 125,000 face-to-face clients are helped each year by financial counsellors and 130,000 calls are made to the National Debt Helpline.
In response to the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry a review into the coordination and funding of financial counselling services was undertaken by Louise Sylvan AM.
The Sylvan Review identified that funding is the largest impediment to more Australians in financial hardship being able to access financial counselling. It recommended industry should contribute funding to address unmet demand for services, as they contribute to demand for services and benefit from their customers accessing financial counselling.
The Industry Funding Model for Financial Counselling was developed in response to the Sylvan Review.
Minister for Social Services Amanda Rishworth said the Government had worked closely with industry representatives from banking and finance, energy, insurance, online gambling, Buy Now Pay Later, telco and the financial counselling sector to establish the new model.
“This new voluntary industry funding model is aimed at improving access to financial counselling services and sharing responsibility,” Minister Rishworth said.
“It has been designed to receive and distribute funding contributions from industries that contribute to demand for financial counselling, and benefit from these services.
“An extra $10 million a year in industry funding could help more than 25,000 people access services like face-to-face appointments with financial counsellors or the National Debt Helpline.”
To date memorandums of understanding have been signed with the Australian Banking Association, the Australian Energy Council, the Insurance Council of Australia, Responsible Wagering Australia, Tabcorp, Afterpay and Telstra.
The Government is continuing productive discussions with other industry representatives, including additional representatives from the energy sector and debt collection sectors.
“Today’s announcement is our starting point, and we will continue to expect full sign-on. We are working to secure the additional funding from industry, and I anticipate we will secure a further $1.5 million from industry by the end of the year,” Minister Rishworth said.
To support the industry funding model, the Australian Government is investing $1.5million to establish a new not-for-profit independent body that will collect and distribute industry funding. The independent body will be responsible for decisions regarding funding allocations and prioritisation and will be established in early 2024.
Funding has also been allocated to data initiatives and an evaluation to inform the longer-term approach to the model.
Having been involved with the development of the model for over two years, Financial Counselling Australia has been tasked with establishing the new body, in consultation with the industry stakeholders.
“This is a red-letter day for the financial counselling sector. We have waited a long time for an industry funding model and are delighted it is finally here,” said Fiona Guthrie, Chief Executive Officer, Financial Counselling Australia.
“We thank the industries and companies involved in the financial counselling industry funding model for their contributions. It is a tangible demonstration of their commitment to supporting their customers who are doing it tough. We encourage the industries and companies not yet involved to also come on board.
“Industry funding for financial counselling is a game-changer and will see thousands more Australians able to access the support they need when they’re doing it tough.”
The National Debt Helpline provides a single contact point for people to access financial counselling. Help is available on the National Debt Helpline website where individuals can chat online with a financial counsellor.