Connect Financial Service Brokers CEO Paul Tynan has called on the local financial services industry and accounting profession to unite and call for financial literacy to be included as a compulsory course in the school curriculum.
In addition to the growing complexity of financial products and services, as well as technology advances, Mr Tynan said the experiences of Australians throughout the COVID-19 pandemic has reaffirmed the push.
“While the coronavirus pandemic upended families, businesses, state, and federal economies, at the grassroots level, it also served to highlight the importance and benefits of solid financial habits,” Mr Tynan said this week.
“Poor financial decisions can have a long-lasting impact on individuals, their families, and society, and many were made during the pandemic – especially when superannuation was allowed to be accessed and many spent those accumulated savings frivolously negating the benefit of years of savings and compounded returns.
“Furthermore, those with savings and sound financial frameworks were better able to weather the economic impact of lockdowns, being stood down and reduction of business revenues.”
Mr Tynan has argued that schools should cover particular topics including the basic understanding of government and reserve bank in managing economic conditions, an overview of the taxation system, how superannuation works and an understanding of basic financial terms such as inflation, interest rates and capital.
“In this current election environment, we hear every day from our politicians’ words like, unemployment, interest rates and economic management – but our education system neglects to teach future generations these basic financial skills for life,” he said.
“Just as learning a new language or skill takes time, building financial skills requires time and years to gradually build knowledge, familiarity, and confidence to manage one’s own finances when leaving school and entering adulthood.”
Mr Tynan’s comments come just weeks after research commissioned by Suncorp Bank found that the current approach to financial literacy in secondary schools is failing.
The study aimed to understand why young women have lower levels of financial literacy than young men and the report’s authors, Dr Laura de Zwaan and Dr Tracey West said that while many other studies found females outperform males overall in high school and outnumber them in university, “there remains consistent evidence that women, and in particular young women, have lower financial literacy levels than men”.
While some students involved in the study were aware of financial concepts such as investing, insurance and superannuation, most had “little or no knowledge and/or understanding” of how they translate to personal finance.
