Financial Counselling Australia has welcomed the Federal Government’s response to last year’s review of the coordination and funding for financial counselling services across Australia.
The review, called the Countervailing Power: Review of the coordination and funding for financial counselling services across Australia, made a series of recommendations to ensure the long-term viability of the sector.
Importantly, the Government has supported the review’s recommendation to increase funding through contributions from industry. We note the Government’s preference for a voluntary industry funding model, covering a wide range of industries, to start from 2021- 22. We also note that if agreement is not reached a compulsory mechanism would be considered.
The financial counselling sector looks forward to working collaboratively with the industries that interact regularly with financial counsellors – financial services providers, energy retailers and telcos – to progress an industry funding model.
We also note the Government’s in principle support for an independent body to oversee the national financial counselling effort, including delivery of funding. We believe an independent body, sitting outside government and with a governance structure modelled along the lines of the successful external dispute resolution schemes (an independent chair, with equal numbers of community and industry representatives) would be an appropriate model. A body like this would be well placed to implement an overall national strategy for financial counselling, responding quickly to changing circumstances.
The Government’s response shows it is committed to ensuring there is sustained, predictable and stable funding for the financial counselling sector.
Current funding arrangements are short-term, ad hoc and uncertain. A new model will mean more Australians in financial hardship will get the assistance they need, especially at a time when many in our community are doing it tough.
Link to the Government response is here.
Link to the review is here.