Funding extension for 12 months is welcomed, but a longer-term response is needed
16th December 2019
This is FCA’s response to today’s announcement in the Mid–Year Economic and Fiscal Outlook (MYEFO) that the Government:
“will provide $10.2 million in 2020-21 to extend the Money Support Hubs, Microfinance program (comprising of Microfinance, No Interest Loans Scheme, StepUp and Saver Plus), and Problem Gambling Financial Counselling measures for one year from 1 July 2020.
Financial Counselling Australia welcomes the Treasurer’s announcement, but is concerned about the short duration of just 12 months funding, rather than extending the commitment over the usual forward estimate period of four years.
Our assumption is that the 12-month duration is because the Government is still considering the funding mechanisms for the sector as a whole, as part of its response to the independent review of financial counselling, conducted by Louise Sylvan AM (the “Sylvan Review”).
The Sylvan Review recommended that State and Federal Government funding should remain unchanged and that additional funding, to meet unmet demand for financial counselling, be sourced from industry levies.
It will be vital that any future industry contributions are not used to reduce current Government funding for financial counselling services.
On 1 February 2020, it will be 12 months since Commissioner Hayne delivered the final report of the Financial Services Royal Commission (FSRC). He wrote in that report that the “desirability for predictable and stable funding for the legal assistance sector and financial counselling services is clear and how this may best be delivered is worthy of careful consideration”.
The Government, to its credit, commissioned the Sylvan Review in response. Ms Sylvan’s report was handed to the Government at the end of March 2019, but not released until October 2019. The Minister for Social Services, the Hon. Anne Ruston said at the time that “the Government accepted the aims of the recommendations”. However the Government is yet to respond directly to each of the recommendations.
We look forward to the Government’s full response to the Sylvan Review in the New Year. It will be important that longer-term funding for the Money Support Hubs and problem gambling positions forms part of that response.
FCA also welcomes the Government’s announcement, in line with its election commitment, of $7 million in funding over two years to expand rural financial counselling to small businesses adversely affected by the drought.
- Money Support Hubs are based in areas where the Government has imposed income management.
- There are 50 financial counselling roles around Australia that focus on providing services to people struggling with gambling issues.
Fiona Guthrie, CEO, 0402 426 835
 Page 275.