OPINION | An estimated three million Australians have difficulty paying bills, putting food on the table or accessing basic financial products like a bank account, credit card or insurance. They are the financially excluded, and half of those facing this grim reality are women.
It is often a frighteningly slippery slope to financial exclusion, with those impacted experiencing poorer social, health and financial outcomes. The financially excluded are also more vulnerable to exploitation and predatory practices from pay day lenders.
In a country as affluent as Australia, the scale of this problem demands an urgent response and collaboration across the business community, if we are to bring about real change.
It’s why some of Australia’s biggest financial institutions are committing to building a more financially inclusive Australia. HESTA is among 12 ‘trailblazer’ organisations to commit to Financial Inclusion Action Plans (FIAPs). Organisations who sign up to the FIAP program are outlining real, measurable actions to tackle financial exclusion and to raise awareness of this issue.
We are the first industry super fund to commit to a FIAP. More than 80 per cent of our 800,000 members are women, so we’re well aware of the challenges they face. Unacceptably, being a woman in Australia in 2016 still means you’re likely earning less than a man doing similar work; you’ll finish your working life with about half the retirement savings of men and, subsequently, be more vulnerable to poverty, particularly when you’re older.
Still more to do
For almost 30 years we have advocated for an Australia equitable for women and fairer for those earning lower wages. We’ve long been committed to helping our members make better financial decisions through supporting them with education and advice. But we also know a lot more still needs to be done.
Research by the Centre for Social Impact shows that 47 per cent of Australians have no savings, 17 per cent struggle with debt, and 17 per cent would have difficulty raising money in an emergency.
Even more alarming, almost half the population report having only a ‘basic understanding’ of financial products and services, with nine per cent saying they have ‘no understanding’ whatsoever.
Our core purpose is to make a real difference to the lives of each and every member and to change the reality of inequity and imbalances Australian women face.
As their long-term financial partner, we’ve seen what our members can do to change their financial situation, despite the barriers. So, we know that building financial resilience is achievable.
Supporting vulnerable members
But we also know it requires a mindset change and so we’re listening and looking in the mirror as an organisation to identify moments of financial exclusion and make the required changes.
It is our moral responsibility as an organisation to do everything possible to protect the holistic financial well-being of our members. For us this goes above and beyond our legislative or regulatory requirements. For instance, members contact us needing urgent access to their super due to financial hardship.
There are strict regulations governing this access that all super funds must adhere to. As a result, we’re not always able to release a member’s funds. Regardless, we believe it’s our obligation to help with access to financial counselling, support and keeping those affected from the grasp of pay day lenders.
Similarly, we think other financial institutions should act to protect those vulnerable to financial exclusion or predatory behaviour. It’s only when we all take on this duty of care that everyone will benefit.
Research by Strategic Project Partners estimated in 2014 that improving financial inclusion could add more than $50.9 billion to household wealth, boost gross domestic product by $19.7 billion and save government $2.6 billion.
The economic argument is compelling and vital for improving the future of those facing financial exclusion and poverty. The moral argument for business leaders across Australia to do more is a given.
Debby Blakey is chief executive of HESTA, a $36 billion industry super fund for the health and community services sector. HESTA is one of 12 organisations, including the nation’s big four banks and Suncorp, to officially launch their inaugural FIAP at the Resilient Women Summit, hosted by Good Shepherd Microfinance, in Sydney on Friday November 25, 2016.