23rd December 2014 – A number of financial counsellors and other stakeholders have contacted FCA asking us about our funding position. We think it is important that we respond to those concerns.
At date, the best we can say is that the position remains uncertain and that we hope to know more in January. In the light of this uncertainty, the Board of FCA will urgently need to assess its financial position and the status of ongoing projects.
Yesterday we were advised that the Government had decided not to proceed with its tender for sector support for the financial counselling and financial capability sectors.
We acknowledge the Government’s decision and understand the budgetary constraints as set out in the Mid-Year Economic and Fiscal Outlook.
We understand however that the Government does recognise the need for peak body support for financial counselling and financial capability workers. The issue appears to be whether it can be funded and to what extent.
We will be seeking an urgent meeting with the new Minister for Social Services, Scott Morrison.
At this point of time, we are unsure whether the FCA conference in May in Canberra will go ahead, even though planning for this is well advanced.
Projects with which FCA is involved and that will need to be reassessed in light of the current situation include:
- Coordination of the national phone counselling helpline, 1800 007 007;
- Management of the consumer website debtselfhelp.org.au. This website has information to assist people in financial difficulty, including an innovative self help tool;
- The management of a password-protected website for the financial counselling sector. This website has tools and resources to help financial counsellors do their jobs more effectively;
- Work with the banking industry to develop a debt repayment service in Australia. The DRS is based on a model used in the UK and assists people with multiple creditors who can pay some of their debts, but not all;
- The establishment of a charitable trust that could manage donations from the industries that have customers that benefit from financial counselling, including banks, utilities, insurance companies and telcos;
- Work with the debt collection industry on a pilot to identify customers who have unrecoverable debts. Debt collectors involved with the pilot then cease collection activity on these debts. Some debts will ultimately be waived;
- Development of national standards for the financial counselling sector;
- Ongoing work we undertake with a range of industries about improving the way they respond to customers in financial difficulty. We are proud of the impact we have had in this area in the past few years, but there is more to be done.
FCA will be celebrating its 30th birthday in 2015. The organisation has been the recipient of government funding at various times in its history and has also operated without funding.
Whatever the outcome in January – whether FCA retains government funding or not – the organisation will continue to exist. Without funding, our capacity to support the sector will be severely reduced, but the need for a peak body remains unchanged.
Background Notes for Editors
FCA currently receives $260K + GST per annum in funding. We employ one full-time staff member and one part-time staff member as well as part-time administrative support.
The additional funding proposed by the Government for FCA was $920,000. This would have allowed us to coordinate training across the sector, improve communication and information sharing and develop tools and resources for the sector. Sector support would have expanded from financial counsellors to also include financial capability workers.
Financial counsellors: community-based professionals providing information, support and advocacy for people in financial difficulty.
Anyone who is in financial difficulty can contact a free and independent financial counsellor on 1800 007 007 or visit www.debtselfhelp.org.au.
For comment please contact: Fiona Guthrie 0402 426 835