The financial counselling sector has welcomed a funding package of more than A$10 million in the Budget, describing it as “transformational” and a “milestone”.
The government has acted on the recommendations of the 2019 Review of the Co-ordination and Funding for Financial Counselling Services for Australia, chaired by former ACCC deputy chair Louise Sylvan, and has provided $10.5 million over the next four years to shift the sector to an industry funding model.
The money will be used to establish a not-for-profit body that will raise funds and distribute them, as well as improve the collection of data that can be used to measure demand for services, upgrade the National Debt Helpline and improve integration between agencies.
Financial Counselling Australia chief executive Fiona Guthrie said the industry funding model would be voluntary but had the support of industry associations in the banking, insurance, finance company, telecommunications and energy industries.
She said industry funding would complement rather than replace government funding and should result in higher annual funding.
“We will be collecting data to show industry the value of what we do, so the proof of the pudding will be in the eating. But we are confident that we will demonstrate the value we provide,” Guthrie said.
“It will allow us to provide services in areas where there is unmet demand, such as family violence and people preparing to come out of prison.”
There was also funding of more than $4 million in the Budget for the provision of financial counselling services to Australian Defence Force personnel, for counselling in communities affected by floods in New South Wales and Queensland and for an extension of the Small Business Debt Helpline.
The Budget funding represents a big turnaround in the Coalition government’s attitude to the sector. An adviser to then Prime Minister Tony Abbott, Tony Shepherd, recommended that financial counselling be de-funded altogether. Funding was cut by about 30 per cent in the 2014 Budget.
“Since then we have had to work hard to show that when we help someone keep their home or avoid bankruptcy we are providing an economic benefit that outweighs the cost of providing the service. Awareness of those benefits is a lot better now,” Guthrie said.