Financial education the only way to bridge world’s fourth largest regional wealth gap
In Anti-Poverty Week, First Nations Foundation is calling for government and financial services to do more to balance Australia’s economic fairness, particularly for Indigenous Australians.
Research released by the International Monetary Fund (IMF) last week examined the gaps between the richest cities and poorest regions across 22 developed nations, and Australia has the fourth-largest divide. The results show that this not only leads to poorer economic outcomes but has a direct correlation to health, with less advantaged regions suffering higher infant mortality and lower life expectancy. Indigenous Australians are the most affected by this.
With remote regions also more dependent on industries such as agriculture, the research also show Indigenous Australians are more likely to be impacted in the future by environmental change such as global warming, which will lead to a widening of the wealth gap between Australia’s most disadvantaged and the capital cities.
“Achieving economic wellbeing for First Nations people must be our highest priority, because as a people they have been systematically excluded from participating in the Australian economy since European settlement,” First Nations Foundation CEO, Amanda Young, said. “Indigenous people have been unable to learn and pass down basic financial literacy because it has only been since the 1970s that Indigenous people have been given legal permission to receive an income or own property.
During Anti-Poverty Week 2019, Young said, they will hear many examples of how the poorest members of our community struggle to survive. That scenario is multiplied many times over when it comes to Indigenous Australians and should the very first priority for the country.
“Our research has shown that 9 in 10 Indigenous people do not have financial security. Three in four Indigenous Australians are excluded from financial services, including superannuation, insurance, and financial advice. One in two is in severe financial stress,” she said.
In partnership with the Centre for Social Impact, First Nations foundation released its Money Stories report in June 2019, which also exposed 75% of people had some difficulty getting help from financial services in the past 12 months, 53.1% of respondents scored as having low to moderate levels of economic resources, and one third scored very low, and 70.9% had low or moderate financial knowledge and behaviour.
First Nations Foundation runs a superannuation outreach program to help people access financial services. In only 21 days the foundation has reconnected 1636 Indigenous Australians with more than $24 million in superannuation. The Big Super Day Out is an example of the work required and how unique solutions must be used to include remote and regional Indigenous people. The foundation also enjoys high success teaching financial literacy to Indigenous people.
“Trust in, and understanding of, financial institutions is low among Indigenous Australians, but real change can be achieved. It’s not good enough to have a tick and flick list you operate from your financial organisation in the city, assuming you are somehow reaching your regional customers, because we can confirm, you are not. Now the IMF confirms it too. Indigenous people respond to Indigenous-led, trusted organisations and our offer to government and financial services is to work with us to achieve a better result.”