Financial exclusion in Australia: whose problem is it to solve?

One in every five Australian adults (3.3 million people) is financially excluded, unable to access safe, affordable and appropriate financial products and services, when they need them [1]. This increases their likelihood of experiencing financial hardship and poverty. Two million people also experience high to severe financial stress, reducing their resilience i.e. ability to recover from financial shocks. Those impacted, particularly women, also experience poorer socio-economic and health outcomes, particularly lower education, employment and income status[1].

Against the backdrop of ongoing global financial and political uncertainty, these challenges can exacerbate the divide between the ‘haves’ and the ‘have-nots’ – in Australia for example, those holding the top 20 per cent of wealth have around 70 times more than those in the bottom 20 per cent[2]. This growing income inequality does not reflect changes in household characteristics, rather changes in the size of persistent and transitory income shocks[3]. Lack of inclusion and resilience therefore compound the impacts of growing inequalities of opportunity, stifling upward mobility between generations, increasing social tensions and reducing economic growth[2].

So who’s best placed to respond to this growing problem – the government with its policy vision for financial wellbeing and capability; business which designs product offerings and offers employment; researchers who study inequality, gather evidence and create theories; or the community sector, which is the usually the first line of defence for excluded and vulnerable Australians? The answer, according to the innovative Financial Inclusion Action Plan program, is all of the above!


This national program, led by Good Shepherd Microfinance on behalf of the Australian Government, has partnered with EY and the Centre for Social Impact to work with key stakeholders from multiple sectors including government, industry, academia and civil society, to co-design holistic and co-ordinated responses to the ‘wicked’[4] problems of financial exclusion and lack of resilience.

Today, on the International Day for the Elimination of Violence against Women, 12 leaders from the government, business, education and the community sectors come together to announce Financial Inclusion Action Plans (FIAPs), detailing specific steps they will take to improve financial inclusion and resilience for large numbers of Australians experiencing financial exclusion, especially women[5].  New measures to assist women experiencing financial abuse and family violence are a common theme across these plans, as are the design of targeted products and education programs, and more pathways to employment for vulnerable groups.

Change takes time, as well as a longer-term commitment to invest the resources required to sustainably achieve these bold, common goals. Economic modelling shows that the collective impact of the FIAP program if sustained over a ten year horizon, could contribute an estimated $2.9 billion p.a. to gross domestic product (GDP), lift household wealth by $11.8 billion and generate government savings of $583 million[6]. Whilst a decade seems far away, the longest journey begins with the first step, which for the FIAP program, is the public launch of over 240 actions today.

by Dr Vinita Godinho
General Manager, Advisory
Good Shepherd Microfinance


1 Financial Resilience in Australia 2015, Centre for Social Impact for NAB

2 Inequality in Australia – A Nation Divided 2015, Australian Council of Social Service

3 Household Economic Inequality in Australia RDP 2015-15, Reserve Bank of Australia

4 Tackling wicked problems: A public policy perspective, Australian Public Service Commission

5 Collective Actions, Leading Change: Financial Inclusion Action Plans Launch Report 2016, Financial Inclusion Action Plan Program

6 SPP Modelling for FIAP Program Implementation Team 2016.


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