I Wish I’d Known Sooner

This week, The Salvation Army and Swinburne Institute released their report I wish I’d known sooner: the impact of financial counselling on debt resolution and personal wellbeing. 

The Salvation Army operate 10 NILS programs throughout New South Wales and Victoria. A key finding of their report is that early intervention with financial counselling is the most effective way of dealing with issues before they escalate out of control.

Based on a survey of 225 people who have accessed The Salvation Army financial counselling services, three-quarters of the respondents said that they improved skills in prioritising debt and felt better able to budget, could avoid legal action and were better able to access creditor’s hardship programs.

Financial counselling is associated with improved health outcomes for people. Nearly 70% of the respondents had a more positive outlook about the future and were less worried about money problems.

Fiona Guthrie, Executive Director of Financial Counselling Australia said that ‘our future research must prove the cost-benefits of financial counselling services’.

According to Guthrie, the ‘demand for our services far outstrips supply. At present in Australia, there are only 900 financial counsellors in Australia. That equates to one financial counsellor for every 2,500 people living in poverty’.

With the current trend in state governments to cut community services, this paints a gloomy horizon for a service that provides a demonstrated, vital lifeline for disadvantaged Australians. Witness Queensland’s cuts. Similarly, Victoria is experiencing such ‘cost saving measures’. For sectors who deal with people living in poverty, our collective goal must be to demonstrate that the benefits of investing in financial counselling far outweigh costs. In other words, there is more bang for the tax payer’s buck.

Good Shepherd Microfinance is about to engage in a study of the impact of the financial conversations had in its No Interest Loan Scheme. Built into the study will be the value of the conversation on the person. This project will develop evidence to help make the case for the crucial benefit such conversations and referrals to financial counsellors are for disadvantaged Australians.

A full copy of I wish I’d known sooner can be accessed here

The week also saw the Australian Council of Social Services (ACOSS) release its first of a series of reports on Poverty in Australia.

And the scorecard is not very encouraging. One person in eight in Australia is living in poverty. That is more than 2 million Australians. The line in the sand used in this report is set at 50% of the middle of disposable income for all Australian households. For a single adult in 2010, this means $358 per week. In the case of a couple with two children it was $752.

In May this year, The Centre for Social Impact and National Australia Bank released their second report on Financial Exclusion in Australia highlighted in our previous blog post, Financial inclusion: is it a figment of our imagination? These findings complement ones in the ACOSS report.

According to Ross Gittins of The Age, our media and public pay more attention to the gyrations of only one of our GDPs: Gross Domestic Product rather than the quiet tsunami of our Gross Domestic Poverty.

Other ways of measuring the extent of poverty, apart from simply not having enough disposable income, can be found on the Community Indicators Victoria website. http://www.communityindicators.net.au/

Their site offers a range of ways

Access a free copy of this report here.  

Access a free copy of Financial Exclusion in Australia here


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