Celia Hammond (Curtin, Liberal Party) Share this | Link to this | Hansard source

Financial literacy is commonly understood to be a combination of the awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial wellbeing. In other words, it's our individual ability to understand how money works in the world as well as how we earn it, manage it and spend it. Those who are financially literate are more informed about what to do with their money and are better able to provide a sustainable financial future for themselves and their families. The key financial literacy elements therefore are knowledge, behaviour and attitude. There are a number of ways of measuring financial literacy. A common approach is to define a person as financially literate if they can correctly answer three questions that test knowledge related to three key financial literacy concepts. These include an understanding of interest rates, especially compound interest; an understanding of inflation; and an understanding of risk diversification.

Australia has a relatively high level of financial literacy when ranked globally. In the 2014 Standard & Poor's global financial literacy survey of 140 economies, Australia ranked in the top 10 countries for financial literacy. Notwithstanding this strong global performance, there is widespread financial illiteracy within Australia, particularly amongst young people. There are also large and significant gender gaps, with women, on average, less financially literate than men. In 2016, the HILDA survey showed that one in two adult women struggled with the three basic financial literacy concepts. This compares with one in three adult men. The HILDA survey has been backed up by numerous other surveys and reports, including one from ASIC in 2017 which revealed that only 35 per cent of all Australians know the exact value of their superannuation and another in 2018 which showed that women were significantly more likely than men to report that dealing with money is stressful and overwhelming.

From a macroeconomic perspective, financial literacy is central to the stability of the financial system. From an individual and societal perspective, it matters for overall wellbeing, as empirical research shows that financial literacy is an important determinant of, and correlates with, a range of outcomes, including wealth accumulation and planning for retirement; superannuation savings; and women's economic empowerment and domestic violence. I note at this point that the government has recognised this as a significant issue and has taken steps to address it through supporting the development of the National Financial Capability Strategy. In the 2020-21 budget, Treasury has given $7.1 million over four years to assist in the rollout of this strategy and improve literacy levels across the country, with the assistance of government and non-government and not-for-profit organisations.

Over the course of the last two years, I've had the opportunity to meet a number of times with a group of women, a number of whom live in my electorate, who are actively involved with this financial literacy strategy, and they've got a particular focus on taking steps to improve the financial literacy of women. These women, including Trisha Lee and Elisa Fear, have formed a not-for-profit organisation called Financial Toolbox, with the aim of building the financial knowledge and skills of Western Australian women to give them independence and freedom of choice throughout their lives. With Professor Lyn Beazley as ambassador and with principal partner Chartered Accountants Australia and New Zealand, Financial Toolbox is powered by a team of passionate and dedicated volunteers. It's important to note that they are doing this in the context not only of the low levels of financial literacy but also the stark facts that the national full-time gender pay gap is 14.2 per cent but, in WA, it's much higher, at 21.9 per cent. On average, WA women have less than half the savings of men, and one-third of WA women currently retire with zero superannuation. Financial Toolbox provides financial education which is independent and unbiased, as they are not related to any financial organisation. Their education events and resources are prepared through the generous time provided by financial expert volunteers, including accountants, lawyers and financial advisers.

Not content with providing general financial education for women, Financial Toolbox is also committed to addressing the invidious position that many women in family and domestic violence situations face when seeking to leave the violent relationship. The statistics in relation to family violence are overwhelming and don't need repetition in detail here. Suffice to say that one in four Australian women will experience some form of domestic abuse in their lifetime. In Australia, that translates to roughly 2.6 million women or more than 265,000 women in WA alone. Experiencing violence also has significant implications not only for the victims but also for their children, families, friends and co-workers. The founders of Financial Toolbox recognise that, given that 80 to 90 per cent of women who seek support for domestic or family violence are also subjected to financial abuse, thousands of women are lacking the financial independence and confidence to leave abusive relationships. So Financial Toolbox created Your Toolkit as their response to family and domestic violence.

Your Toolkit is an important and all-encompassing web based resource, providing free, accessible and practical information on personal safety, support and referral services and on money matters. The unique point of difference with Your Toolkit is that it provides in the one place all the information women need at various stages of their journey facing domestic violence. In developing Your Toolkit over more than two years, they heard from industry professionals and from women who had experienced family and domestic violence. They heard that the information they presented had to be somewhere that was easy to find and it had to be simple to understand. They were told on numerous occasions that users are not always browsing with a clear mindset; they can be in states of emergency, fear, panic and high stress when accessing the service.

Now that it's set up, Your Toolkit divides the process of promoting in women the confidence to leave abusive relationships and the confidence to achieve financial freedom into four accessible steps. The first step is called 'Prepare'. It sets out information for women on how they can protect themselves and safeguard their security and the security of their children as they prepare to leave an abusive partner. The second stage is 'Act now'. In this part, the website presents information on how survivors can keep themselves and their children safe when leaving an abusive relationship. The third stage is 'Rebuild'. This provides advice to survivors who have recently left an abusive relationship as to how they can protect themselves and their finances. It includes information about accessing legal advice and government support. The fourth stage is one that they call 'Thrive'. This provides information on how a survivor can establish financial foundations, build their financial security, and set goals and saving strategies.

Financial Toolbox have undertaken their first social impact report. This has shown that, since the toolkit's launch in March 2019, they have had over 52,000 users and 61,000 sessions. It is predominantly being utilised by women and is widespread in terms of age across all age groups. The majority using it—56 per cent—are based in Western Australia, but that still leaves a significant proportion of people who are accessing this site outside of Western Australia. Of those who've answered the specific questions, 55 per cent have experienced or are at risk of experiencing domestic abuse. The qualitative results of the social impact report show overwhelming support from industry participants. There are also testimonials from women with lived experience, including this: 'Thank you for doing this work. This work is incredibly important. There are so many women I know who would love to say thank you but can't. They're voiceless. So I speak for all of us when I say thank you. It's incredible and it's amazing.'

With the immense demand for Your Toolkit, Financial Toolbox are looking to make this service truly national, hoping to build a database of resources and organisations relevant to survivors across the whole breadth of Australia. Given the quality of the work that they have done on this matter, I am going to be strongly supporting all of their attempts for funding to continue and expand this program, because it is and can be a life-saver.