Topics: Industry Funded Model for Financial Counselling
URSULA HEGER, HOST: Well as the cost of living crisis continues to squeeze families, Australians will be given more access to financial counselling services partly funded by gambling giants, the big banks and insurance companies. The three year deal means up to 125,000 people will receive additional face-to-face help every year. Joining me now to discuss this is Social Services Minister, Amanda Rishworth. Thank you very much for being here. So, what does this deal mean? Is it free access to more help?
AMANDA RISHWORTH, MINISTER FOR SOCIAL SERVICES: Yes, it is free access to more help for those doing it tough. Already the Commonwealth Government funds about $50 million a year in financial counselling. But this agreement with many people, industry bodies, will put more money into financial counselling which will mean more access for more people. So it is a really important recommendation, or it was a really important recommendation, from the Hayne Royal Commission and now I'm very, very pleased, with the cooperation of Financial Counselling Australia and with many industry groups, we've been able to inject close to $10 million extra a year for extra financial counselling.
URSULA HEGER: And how does somebody get access to that? What should they do if they're financially struggling?
AMANDA RISHWORTH: There is the National Debt Helpline, which is 1800 007 007 that can provide you free access to financial counselling over the phone, but also on the National Debt Helpline, there is a place where you can visit and find a local financial counsellor in your local area. Many community organisations offer financial counselling so you can put in your postcode and actually get access. It's really important to see a financial counsellor rather than opting for sometimes those buy now, pay later loans when you can't afford it, or indeed some of the other high interest loans. So, it is really important to get support from a financial counsellor if you are needing that extra help.
URSULA HEGER: This is funded partly by the Federal Government, the states and industry, including Buy Now, Pay Later. Why is it important to have big businesses pay?
AMANDA RISHWORTH: A recommendation from the Royal Commission and then the subsequent review, called the Sylvan Review, recommended that industry benefits. If people are not able to pay their phone bill or their electricity bill then actually business suffers along with the individual. So, it was recommended by the Royal Commission that industry do contribute to the costs to bring down those wait times. So, it is very important that industry has contributed, it has been voluntary. So, I'd like to really recognise those businesses and industry organisations, including the Insurance Council of Australia, the Australian Banking Association and indeed the energy retailers that have come on board and actually made a contribution, because they can see the benefit not just to those that are facing financial hardship, but also the benefit to their business as well.
URSULA HEGER: Not all businesses have signed on. I understand that Optus is one of the holdouts. What are you going to do about that?
AMANDA RISHWORTH: Look, it has been very reassuring that many organisations and industry bodies have signed up. But we still have, whether it's in telecommunications – I would note Telstra has signed up – but other telecommunications have not signed up as of yet, along with other non-bank lenders. Afterpay has signed up, but others have not. So, it will be very important that we will continue to work with those businesses and those industry bodies because we want to see more of these groups sign up and be part of what is a world-first in terms of an industry funded financial counselling model.
URSULA HEGER: Is this a bit of an admission that some of these industries are still making massive profits, even during the cost of living crisis?
AMANDA RISHWORTH: It's an acknowledgment that people can face financial hardship, often as a result of mounting bills. And actually, financial counsellors are best placed to help sort people's financial situations out. They help provide confidence, they help provide assistance, someone to talk to, someone to work through with companies that they owe money to, how to actually organise and support them through that very difficult process. So, it's an acknowledgment that business have a role to play, industry has a role to play, but it's also an acknowledgment that there are benefits. If you're able to structure a payment plan supported by a financial counsellor to pay back the debt that you owe, that's a good thing for everyone. And so this is a really important step forward to actually support individuals, because financial counsellors, they do save lives and they save livelihoods.
URSULA HEGER: Well, it certainly is an interesting one. Thank you Minister for your time today.
AMANDA RISHWORTH: Thank you.