Increasing Personal Resilience will not fix Structural Unfairness.

By Gerard Brody and David Tennant

Gerard Brody is the CEO of the Consumer Action Law Centre and David Tennant CEO of Shepparton–based FamilyCare. Both participated in the Advisory Committee for the CSI/NAB Financial Resilience in Australia 2015 Research.

The National Australia Bank has made significant investments in addressing financial disadvantage and exclusion in Australia. It is the main funder of the national No Interest Loan Scheme and has provided lending capital in excess of $170 million distributed to low income borrowers through Good Shepherd Microfinance’s extensive network of NILS lenders. The NAB also commissioned Australia’s first coordinated research into financial exclusion in 2011, with updates provided since.

The Bank’s latest contribution was marked by the release of Financial Resilience in Australia 2015.[2] The report was prepared by the Centre for Social Impact, with NAB the sole commissioning and funding body.

The Financial Resilience report makes interesting reading, concluding that around two million Australians experience severe or high financial stress and vulnerability.[3] In determining the level of resilience across the population the researchers considered access to four groups of resources – economic (basically how much money a person has available to them from all sources, allowing for essential commitments); financial products and services; financial knowledge and behaviour; and social capital. Using this framework against a wide variety of data from commissioned research, purchased consumer research and publicly available population data, the authors confirmed a variety of co-relationships.

Many of the co-relationships identified in the report are unsurprising. People on very low incomes are proportionally more likely to be financially stressed. They are also likely to be pessimistic and prone to other vulnerabilities, such as under or unemployment, insecure housing and mental health problems.

The report acknowledges the interaction between personal capacity and external environment: "Resilience relies heavily on an individual’s access to internal resources and appropriate external resources".[4]

Whilst recognising the critical impact of low income[5] the report’s authors appear to be more focused on individual capacity than structural conditions that may limit choices and behaviour. For example, the report emphasises the finding that over half of those interviewed indicated that they had a basic or no understanding of financial products and services. This is stated without acknowledging the widespread recognition that financial products and services have become unnecessarily complex, increasing risk to consumers.

Further, unlike previous iterations of the Financial Exclusion research,[6] the report does not interrogate the cost of financial services, a key structural barrier. While the report’s survey results found that cost was the most common barrier to accessing financial services, the prior research determined the average annual cost of basic financial services. In 2013, this was found to be $1,801—for over 8 percent of the population, this represents over 15% of their annual income. The cost of a basic bank account was $82, which stands in stark contrast to the wide availability of free basic bank accounts offered by many of our banks.[7] Clearly, more needs to be done to ensure those eligible for basic bank accounts are provided them.

The stated intention is for financial resilience to become the new measure, replacing the financial exclusion indicator and for the framework to be used to assess the effectiveness of external interventions. More work will be required to prevent the new approach excusing current policy settings that cause or keep people in extreme financial stress. The current level of Newstart allowance is set below $14,000 per annum. Budget proposals to remove the energy supplement would see it fall further. The stress and in some instances humiliation caused by benefit levels set under the poverty line should be self-evident.

Similarly the current approach to welfare reform and benefit conditionality focuses on individual obligation above structural obstacles rather than seeking balance between the two. Unless great care is taken, the resilience framework will feed this approach, rather than recognising that much disadvantage and the financial stress it creates is entirely preventable.



[2] Muir, K; Reeve, R; Connolly, C; Majolin, A; Salignac, F and Ho, K (2016) Financial Resilience in Australia 2015, Centre for Social Impact (CSI)- University of New South Wales, for National Australia Bank.

[3] Muir et al, Financial Resilience in Australia, ibid, page 9.

[4] Muir et al, Financial Resilience in Australia, ibid, page 12.

[5] The report highlights ‘differences in the level of resources across the four financial resilience components’ Muir et al, ibid, page 85.

[6] See, eg, NAB and CSI, Measuring Financial Exclusion in Australia, April 2014, available at:

[7] See: