The financial counselling sector has received its first round of funding under a new industry funding model, reporting contributions of around A$9.6 million from companies and industry bodies.
The Financial Counselling Association said in a statement that it welcomed the commitments from entities in the banking, insurance, energy and online wagering industries but added that it was disappointed with some industry players that did not participate.
The funding target is understood to have been around $18 million. While the Australian Banking Association contributed more than $6 million collected from its members, the Australian Finance Industry Association did not make a contribution.
The FCA said companies that have not agreed to contribute funding include Latitude Financial Services, Afterpay, Zip, Pepper Money, Liberty Financial and La Trobe Financial.
The only company in the debt buying and collection sector that contributed was Credit Corp.
Last year, the government acted on the recommendations of the 2019 Review of the Co-ordination and Funding for Financial Counselling Services for Australia and provided $10.5 million over four years to establish an industry funding model.
The money is being 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.
The industry funding, which is voluntary, will complement ongoing commonwealth and state funding for the sector, which amounts to around $50 million a year.
The government set a deadline of August 31 for participants in the new voluntary funding model to sign memoranda of understanding. The body that will administer the funds is expected to be set up by the end of the year.
FCA chief executive Fiona Guthrie said the sector would prefer a mandatory funding model based on industry levies.
“The experience of trying to secure voluntary contributions highlights the inherent flaws in a voluntary model,” she said.