Private Sector Commits to Financial Inclusion

Leaders from the private sector have committed to take collective action to improve financial inclusion, which, along with social impact, could add billions of dollars to Australia’s economy.

The so-called trailblazers are a group of 12 organisations across business, government, academia and civil society that publicly released their financial inclusion action plans (FIAPs) detailing the steps that they would take to support people experiencing financial exclusion, particularly women.

“These plans include measures and investments that will build financial inclusion and resilience for everyone – be it through product development, education or employment,” FIAP advisory group chair and ACCC deputy chair Delia Rickard said.

“These measures have a particular focus on reducing gender inequality and will have tangible outcomes.”

According to Good Shepherd Microfinance, appointed by the federal government to develop the FIAP program, there are two million people in Australia experiencing a severe level of financial stress.

Economic modelling from Good Shepherd’s partners, the Centre for Social Impact and EY, found implementing FIAPs could significantly lift household wealth.

“The economic modelling basically looks at what can be the impact over a 10-year horizon,” Good Shepherd Microfinance general manager Vinita Godinho told Pro Bono Australia News.

“[It] shows that the net household wealth of those who are impacted can actually improve by $11.8 billion.

“That itself will improve GDP by $2.9 billion and also result in government savings of $583 million. For instance improved employment means less dependence on employment welfare, improved health outcomes so less dependence on health care… so some real tangible benefits

coming out of the very simple actions.”

While only 12 organisations have released their FIAPs, the modelling takes into account the actions of the 30 organisations that will complete the program over its two-year course.

Godinho said the program was likely to have run-on effects.

“We’ll have 30 by next year, which is still a small group, but if you consider that we’re picking them across each of the four sectors, they form those trailblazer pioneers who are taking action,” she said.

“And by making their actions public what we hope is that others in the industry and the sectors that they represent will start emulating their effects.”

The first 12 organisations, AnglicareSA, ANZ, Bank Australia, BaptistCare, Commonwealth Bank, EnergyAustralia, HESTA, NAB, Queensland Government, Suncorp, Swinburne University and Westpac collectively committed to more than 240 actions.

HESTA, the $36 billion industry super fund, said its FIAP would improve financial resilience for its 820,000 members, 80 per cent of which are women.

A key action in its plan is allowing early access to superannuation in times of financial hardship, if people meet a number of specific conditions.

HESTA will make it “quicker and easier” for members to make a claim as well as providing financial counselling and support.

“Three million people in Australia are experiencing some form of financial exclusion, many of these are women, and this puts them at greater risk of poor social, economic and health outcomes,” HESTA CEO Debby Blakey said.

“Through the FIAP we have identified ways to improve our processes, services, and how we partner with organisations to ensure that every one of our members, in particular females, have a secure future.”

BaptistCare, in its FIAP, committed to continuing its support for women experiencing domestic violence through economic control.

“We’re at the coalface of this battle and we know the impact of financial exclusion can be profound. There can be any number of causes, from prolonged unemployment to homelessness, family dysfunction and often domestic violence,” BaptistCare general manager of community services Rob Ellis said.

“Given BaptistCare already provides frontline services to women escaping domestic violence, we wanted to ensure our FIAP continued our work in driving awareness and availability of vital support services like housing and interest free loans for vulnerable women in their most critical time of need.

“In launching the FIAP we wanted to shine a light on financial abuse as a particular form of domestic violence that can have a significant impact on a woman’s decision to remain in an abusive relationship.”

Godinho said the launch of the FIAPs brought the program “to real life”.

“Many people ask me ‘which are your favourite actions?’, so it’s a little bit like asking which are my favourite children because they’re all special,” she said.

“Each one has made a real effort to consider what financial inclusion and resilience means for their organisation and then how they can promote it, not just for their customers but also for their staff, their suppliers and the wider community.”

She said the 12 organisations were collaborating across the four sectors and achieving greater outcomes than they would with a siloed approach.

“Each one has been trying its best to address this problem, but by bringing them all together the opportunity to collaborate is actually offering synergistic benefits which is much larger than what the individual actions can offer,” she said.

“Financial exclusion is a wicked problem and no one sector can solve this problem on their own, and we found that, irrespective of these organisations taking action over the last 10 years, exclusion has still increased.

“So now by combining our efforts, what we’re finding is fantastic new opportunities to partner. We find very small community organisations offering, for instance, affordable housing are now able to partner with a large superannuation firm. So previously where their efforts were very small they’re now able to scale up their efforts because of a new partnership opportunities offered by the collaborative approach.”

Godinho also said the bottom-up approach of FIAPs was unique on the global stage, and was helping Australia to meet its sustainable development goals.

“Australia has signed up to the G20 and we have a global partnership for financial inclusion, which all of the member states have vowed to have,” she said.

“By doing this program at a ground level, with bottom-up action coming from the organisations themselves, Australia now has the opportunity to have a really true collaborative approach to a financial inclusion action plan, which is very different to the ones other states are forming because they’re top down.

“Government is coming up with the plan, then they have to engage everybody else to actually action it, whereas ours is very unique because we’re actually having… the private sector… themselves committing to actions which can then help the government to meet sustainable development goals.”

If you or someone you know is impacted by sexual assault, domestic or family violence, call 1800RESPECT on 1800 737 732 or visit 1800RESPECT.org.au.