Financial Counselling Industry Fund director Greg Tanzer
The Financial Counselling Industry Fund, which will administer industry contributions to the financial counselling sector, has opened for business with A$33 million of commitments in its kitty.
The inaugural board is chaired by Peter Kell, former ASIC deputy chair and currently managing director of Promontory Financial Group. Other directors are former ASIC commissioner Greg Tanzer, who was nominated by the financial counselling sector; and former Commonwealth Bank executive and current deputy chief executive of the Australian Banking Association Vanessa Beggs, who was nominated by industry stakeholders.
Four more directors are to be appointed.
The $33 million of industry funding, which will be contributed over three years, is voluntary and is in addition to around $50 million a year of Commonwealth funding and $30 million a year from the state and territories.
Companies making contributions include 13 members of the Australian Banking Association, 28 members of the Insurance Council of Australia, seven members of the Australian Energy Council, 19 members of Energy Networks Australia and six members of Responsible Wagering Australia.
A notable abstainer is the Australian Finance Industry Association. Only one of its members, Afterpay, is a contributor.
Credit Corp is the only contributor from the debt buying and debt collecting sector.
Telstra and Optus are the only telcos.
The idea that businesses that benefit when their customers receive advice and support from a financial counsellor should contribute to counselling costs had been kicking around for a long time but was taken up by government after the 2019 Hayne royal commission recommended a more stable funding model for the sector, with industry contributions.
The 2019 Review of the Co-ordination and Funding for Financial Counselling Services for Australia, chaired by former ACCC deputy chair Louise Sylvan, said a lack of adequate funding was the biggest impediment to more Australians in financial hardship being able to access financial counselling. It recommended that industry should contribute funding to address unmet demand for services.
In response, the Minster for Social Services Amanda Rishworth co-ordinated the signing of a number of memorandums of understanding with industry bodies and individual companies.
Greg Tanzer told Banking Day that the mechanics of how the funds are to be distributed is yet to be worked out. It may be that the money will be divided among established counselling services or the board may identify areas of unmet demand, where new services could be established.
Tanzer said Financial Counselling Industry Fund will conduct research on the sector and contribute to the evidence base on where funds are best used.