Sydney, 28 June, 2006: Dr David Morgan, Chairman of the Australian Bankers’ Association (ABA), said one of the sustainability priorities for the nation which banks can most affect is improving financial literacy levels.

Delivering the keynote speech at today’s Financial Literacy Symposium in Sydney, Dr Morgan said: “Broadening Financial Understanding is really part of the wider sustainability agenda. An agenda that is determined, not just by the banks, nor by the government and the community alone. It is determined by all of us, working together in partnership.”

Recent research has shown that by increasing financial literacy levels over the next decade by a modest amount among the 10% of Australians who are least financially literate would lead to positive outcomes for the individual and the country. For example, personal income levels would be increased by around $3000 a year. In addition, $6 billion a year would be contributed to Gross Domestic Product (GDP) and 16 000 new jobs created.

Dr Morgan said an informed and educated consumer is more likely to make better choices about financial products and money management. This is why banks have been producing financial literacy programs and materials, and encouraging consumers to use them.

“To assist consumers find information easily, the ABA has created a new section on its website called the ‘Financial Literacy Information Centre.’ It is a hub where consumers can find fact sheets on personal finance topics, handy booklets on banking, credit, superannuation and budgeting as well as useful links to banks’ financial literacy materials, ” Dr Morgan said.

The ABA’s Symposium is an important opportunity to learn best practice approaches on financial literacy from the UK, USA and other OECD nations.

Bill Cheeks, from the United States, will share his experience with the Jump$tart Coalition for Personal Financial Literacy.  His organisation’s concern is that many young people fail in the management of their first consumer credit experience, establish bad financial management habits, and stumble through their lives learning by trial and error.

“Jump$tart’s objective is to encourage curriculum enrichment to ensure that basic personal financial management skills are attained at school. I always say that you don’t need to invent the education wheel but give it a bit of balance,” Mr Cheeks said.

From the UK’s regulator, the Financial Services Authority, Jim Dredge will speak about the Financial Capability and the Workplace program which delivers seminars to people at work.

“The message we get back from participants is to keep the seminar simple. That is, not necessarily around financial products, but to focus on the concepts of financial services, and how to use them effectively. Some of the issues with financial capability really boil down to a lack of understanding about the consumers' own basic income and expenditure.”

“Where does my money go each month, particularly the $50s I keep drawing out of the cash machine? What are my short and longer term financial goals? Interestingly, when people get these basics right, one thing they would like to go and do is consider serious long term saving or preparing for the future,” Mr Dredge said.

The final speaker from overseas was Barbara Smith of the Organisation for Economic Cooperation and Development (OECD) which recently produced a report on global financial literacy.  Ms Smith said we should be concerned about financial literacy levels because we are living longer, and spending more time in retirement, while changes in pension arrangements are giving many of us more responsibility for making choices about participation, contribution levels, and investment of our retirement contributions.

“With the increase in the number of individual investors, there is a need for better financial understanding for personal wellbeing and a more efficient securities market. And in Australia, as in most western nations, we are not saving enough for our retirement,” Ms Smith said.

Invited to today’s Symposium were a range of consumer groups, financial counsellors, bank staff and government officials who develop policy in this area.

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