Urgent action is needed to address financial exclusion
As the 2019 New South Wales State election is fast approaching (March 23, 2019), a policy think tank on financial inclusion has proposed an election platform paper with specific state level concerns and possibilities. Jenni Beetson-Mortimer (@BeetsonJenni) who heads up this coalition – NSW Financial Inclusion Network, is our blog contributor today. Jenni is the CEO of Northern Rivers Community Gateway, a registered not-for-profit which provides welfare and community capacity building programs for disadvantaged individuals and communities across NSW and extending to the Far North Coast, New England and Mid North Coast of the state. Located at the forefront of service provision, Jenni bring her experiences, knowledges and collaborative scholarship to persuade NSW policy makers to act on the issue of financial inclusion.
Financial exclusion causes and compounds financial disadvantage. It can lead to poverty and homelessness, amplified mental health problems, continued welfare dependence, remaining in a violent relationship, poorer educational outcomes for children and increased law breaking or criminal offences.
NSW experiences significant levels of financial exclusion despite exceptional economic growth over the past 4 years. More than 2 million Australians experience severe or high financial stress with one in five reporting they cannot raise two thousand dollars in an emergency. This statistic is not improving.
The NSW Financial inclusion network, a collaboration of key stakeholders working in the financial inclusion space, call on the NSW Government to take action now to reduce levels of financial exclusion.
Some action points are:
Adopt a whole of government approach to addressing financial exclusion and resource a central unit that works with the financial inclusion network to develop a whole of government costed strategy. Obtain a baseline for financial exclusion and set targets for improvement.
Invest in building financial resilience by funding financial capability workers, including designated Aboriginal workers. These workers, as an early intervention measure, would address a huge gap in the current service system.
Develop financial inclusion strategies for aboriginal communities and people living remotely. Even though Aboriginal people and those living remotely are two of the most disadvantaged communities in NSW, there is very little research that examines their financial exclusion. Aboriginal economic activity is vital to build a stronger foundation for social, economic and cultural prosperity. Supporting greater participation and opportunities for Aboriginal people will create jobs and employment, lift education and skills, and activate regional economic potential. We call for the government to consult with Aboriginal communities, fund research into the financial exclusion of Aboriginal, rural and remote communities. To set targets that reduce financial exclusion and expand energy and water cost reduction initiatives in Aboriginal, rural and remote communities.
Develop innovative programs to intervene early and prevent escalating tenant debt. Debt associated with housing costs often leads to the loss of utilities or worse eviction. Rent arrears is a significant cause. The inability to repay debt in private rental as well as social and community housing ruins lives. We call on the government to fund financial counsellors to work with tenants that have rent arrears, support housing providers to trial innovative incentive programs to enable them to pay off their rent arrears, fund the retro-fit of social houses with energy saving devices to reduce energy costs and to establish a no interest loan program to enable tenants to repay rent arrears.
Seek urgent action from the federal government to change legislation pay day loans and rent to buy goods. Reforms in this area will lead to reduced need for financial counselling and legal services to support people who fall victim on unscrupulous lenders and allow services to focus on early intervention strategies. It will also reduce the flow on impacts of financial exclusion such as alcohol, other drugs, mental health and gambling.
Current Australian financial exclusion rates of 17% are a significantly higher percentage of the population than any developed nation should be comfortable with. Improving financial inclusion in NSW provides protections for the most vulnerable, enables safer communities and provides improved services that support families and individuals to become more financially included and ultimately leads to a stronger budget and economy for NSW.