Last year the Federal Government cut funding to some peak bodies, including bodies representing disability and housing services. It may initially appear sensible to make funding cuts to ‘peak bodies’ that don’t usually provide direct services to clients – but these bodies indirectly help disadvantaged people in ways that individual services can’t.
I’d like to share as an example, the work of one peak body I am familiar with – Financial Counselling Australia (FCA). To date FCA receives funding from Government to employ just over 2 FTE positions; however its funding position beyond June 2015 is unclear.
What is Financial Counselling?
Financial counsellors are funded (primarily by state and federal governments) to provide free information, support and advocacy for disadvantaged people experiencing financial difficulty.
So what does Financial Counselling Australia do?
Working with industry to improve outcomes for financially vulnerable people by:
- working with companies and industry bodies to improve ‘hardship policies’ (for example negotiating a ‘best practice hardship guideline for the telecommunications industry) thereby making it easier for financial counsellors – or even the individuals themselves – to negotiate a satisfactory payment arrangement;
- encouraging improvement in the way businesses respond to people in financial difficulty, for example by publishing “Rank the Banks” which exposed the best and the worst bank responses to customer financial hardship;
- working with key creditor and debt collection bodies to pilot a ‘hardship register’, which would stop debt collection activity against individuals who were in long-term financial hardship;
- working with a number of banks and creditors to establish a debt-repayment service, that would enable those who could make some payments to avoid more serious options such as bankruptcy;
- consulting regularly with industry about problems financial counsellors are seeing, for example meeting with the Australian Bankers Association about debtors in particular circumstances such as those in hospital (long term) and prisons.
Helping financial counsellors do their jobs more effectively by:
- providing tools and information for financial counsellors via a password-protected website to keep financial counsellors skilled and up-to-date;
- establishing a member registration system for trained, accredited financial counsellors so that businesses know who they were dealing with – leading to faster contact with the right person/department by financial counsellors and therefore a faster response for their clients;
- supporting a national financial counselling helpline (1800 007 007) which FCA helped to establish in 2010. The line receives over 130,000 calls per year and ensures that more people can easily access a financial counsellor in their state;
- development of national standards for financial counselling to ensure high quality financial counselling services;
- administering a charitable trust (the Jan Pentland Foundation) that provides scholarships for individuals who are undertaking training in financial counselling and money management.
Making things better for vulnerable consumers
While individual financial counsellors identify what causes problems for some of their clients, it is often when this information if fed to a peak body that something can be done. FCA shares information about these problems with industry, government (through meetings or written submissions) and to the public via the media. Examples include:
- Payday lending;
- The impact of ATM fees and high-pressure selling in indigenous communities;
Problems with the Government Centrepay system, particularly in relation to expensive consumer leases;
- The impact on a proposed bankruptcy fee on low income clients. Only the financial counselling sector were able to illustrate that even a relatively low fee could have a negative impact on people who were in financial crisis.
Promoting financial literacy and financial counselling by:
- maintaining debtselfhelp.org.au which enables some people in financial difficulty to self-help;
- playing a role in promoting financial counselling to those who need help. In recent times this has included promoting the benefits to a wider audience as financial counselling services feared potential funding cuts.
Funding for peak bodies
FCA doesn’t achieve all this on its own – it works closely with its members, and state peak bodies (such as Financial and Consumer Rights Council in Victoria) which also play an important role in maintaining service standards and raising issues that impact on financial counselling clients.
While the work of peak bodies for community services vary, many do similar work to that of FCA. Their contribution to the well-being of Australians may not be as visible as that of the services ‘on the ground’. However, they can increase the quality and improve the efficiency and accessibility of services. Just as importantly, they can share with stakeholders, Government and the community factors that impact on the client group – and they can bring about changes that improve outcomes for the group. In some cases these changes (such as improving bank hardship programs) can prevent, or help resolve, problems for people who then have no need to access a funded service.