Financial literacy critical to protecting Australian lifestyle

25 February 2004

Download the 'DOs and DON'Ts Guide' (pdf 93KB)

Financial literacy is critical to protecting the Australian lifestyle, according to Bill Moss, Chief Executive of Macquarie Bank's Banking and Property Group. Opening the Macquarie Bank Lecture on Financial Literacy - An Australian Priority in Sydney today, Mr Moss said it is a concern that many ordinary Australians are not financially literate.

Lack of financial literacy not only leaves Australians open to being defrauded of their money, but it also means they are not managing their money in the best manner for their financial security.

"Millions of Australians do not seem to have the basic financial knowledge to put strategies in place to manage their debt, protect their assets or grow their wealth. To take a simple example, RBA statistics show: Seven out of 10 Australian households have credit cards with an average debt of $4734 costing the card holder up to 17 per cent a year in interest. It is frightening to think that household debt has been increasing at 23 per cent a year while income growth is moving at 4-5 per cent."

Mr Moss added that managing money is a skill, and like any skill it can be taught, "Financial Literacy must start in our schools. Once your basic financial skills are in place, you can grow your financial security. You will also fraud-proof yourself as you have removed the essential ingredient of a fraud - a naïve, or too trusting, victim who is not financially literate. Protecting your house, money and investments are critical to protecting your family and your future."

While financial literacy has to be absorbed at the individual level, Mr Moss said the government and private sectors have responsibilities too. "There must be commitment at the bipartisan political level to a national financial literacy programme. Corporations too must acknowledge that they have a responsibility to make their customers aware of the risks they are taking when accepting credit arrangements.

"In other words, we must align our priorities to enable individual Australians to secure their own financial security and a prosperous future for Australia, and to prevent themselves from becoming victims of fraud."

Other speakers at the seminar were:

The Hon. Peter Costello MP	Treasurer of the Commonwealth of Australia
Sen. The Hon. Helen Coonan	The Assistant Treasurer and Minister for Revenue
Peter Kell	Executive Director of Consumer Protection, Australian Securities and Investments Commission and Member of the Consumer and Financial Literacy Taskforce
Paul Clitheroe	Founding director of fund management firm IPAC and one of Australia's foremost promoters of financial literacy through Channel Nine's 'Money' Program and magazine and Chairman of the Consumer and Financial Literacy Taskforce
Peter Bobbin	Senior Partner with the Argyle Partnership, a Sydney based law firm servicing the Financial Services industry

A valuable 'DOs and DON'Ts Guide' (pdf 93KB) for protecting investors against financial scams and developed jointly by the Australian Securities & Investments Commission and Macquarie Bank was also launched at the seminar.

Financial Literacy - An Australian Priority is the fifth seminar in the Macquarie Bank Lecture Series on Fraud which examined issues ranging from banking fraud to identity fraud to housing fraud.

For further information contact:

John Winter
Wilkinson Media
Mobile: (61) 414 533 133
Tel: (612) 8969 6255

Robyn Turner
Macquarie Public Relations
Tel: (612) 8232 6989