Stella Avramopoulos

The economic impact of the Coronavirus pandemic has created a new group of economically vulnerable^[1] people, with young people, recent migrants and women among those hardest hit.

Research that has tracked close to 6000 working Australians since April also found those already on average or lower incomes were most likely to have suffered negative impacts to their employment during the pandemic.

Commissioned by not for profit Good Shepherd, the research found that 60 per cent of working Australians on average or lower incomes had experienced employment changes such as having hours reduced, pay cut, being stood down or made redundant, creating a new class of economically vulnerable people.

Young people in the workforce were among those most financially impacted, with half of those aged 14 to 24 now economically vulnerable.

Migrants who have been in Australia less than five years were far more likely to have had their work negatively impacted, compared with longer term migrants and Australian-born.

Good Shepherd’s CEO, Stella Avramopoulos, said the research by Roy Morgan Research offered hard evidence that the most vulnerable were bearing the greatest economic impact of the pandemic.

“These are shocking figures.  Two out of five of all working Australians have suffered job losses, cuts to hours and pay or being stood aside. Even worse, those already on average and lower incomes are the most affected.

“Despite the government supports being offered during this pandemic, financial distress is now the most significant welfare issue facing Australia. We need long-term, structural changes to the social welfare safety net, with new service models and cross-sector strategies.

“People are overwhelmed, they are distressed and they often feel stigma and shame. This is a crisis that no one expected, it has hit suddenly and it is out of peoples’ control.

“Good Shepherd’s financial counsellors and other front-line staff have supported many thousands of people since this pandemic hit. People need safe, reliable information and support to help them navigate the multiple challenges they are facing,” Ms Avramopoulos said.

Good Shepherd is supporting those experiencing financial distress due to the pandemic with a range of services including financial counselling and Household Relief Loans Without Interest, which is supported by the Australian Government and National Australia Bank.

The program includes financial information and support and access to loans of up to $3000 for rent and utility bills for those eligible. An individual’s income must be less than $60,000 gross or less than $100,000 for couples or people with dependents, or be receiving a Government benefit, such as Centrelink healthcare card or Pensioner concession card.

The Minister for Families and Social Services, Anne Ruston, said the Scheme will help Australians experiencing financial hardship.

“This additional funding will help around 40,000 Australians access immediate financial relief to help pay household bills and buy essential products. Better access to emergency relief services means less reliance on high-risk, high-interest loans to get people through these tough times,” Minister Ruston said.

NAB’s Group Executive Personal Banking, Rachel Slade, said the bank would continue to work with government and key partners to support people through the coronavirus crisis.

“We know some people are doing it tougher than others and need financial relief. That is why we’re helping fund this program – we see it making a difference for Australians through this uncertain time,” Ms Slade said.

The Household Relief program has been in pilot phase for six weeks and is now being rolled out across the country. Ms Avramopoulos said Good Shepherd was already seeing people not only in financial trouble, but also with significant social vulnerabilities.

“About 20 per cent of people have a social vulnerability including family violence, disability, gambling, mental health, relationship or substance abuse issues. Half have a financial vulnerability, including financial hardship and financial disadvantage and only 16 per cent could meet an unexpected expense of $2000.

“The main driver of the financial crisis for the people we are seeing is credit card debt and personal loans and nearly all of the people referred have at least one payday lender,” Ms Avramopoulos said.

Key findings of the Roy Morgan study include:

• 42 per cent of all working Australians (two out of five) have become economically vulnerable, with negative changes to their employment caused by the pandemic.
• 58 per cent of working Australians on lower and average incomes have experienced negative changes to their employment caused by the pandemic.
• More than 50 per cent of working Australians aged 14 to 24 have become economically vulnerable.
• Migrants who have been in Australia less than five years are far more likely than Australian-born people to have become economically vulnerable, with 38.4 per cent of migrant working Australians who have been in Australia less than five years now vulnerable.
• Small business operators and those working in recreation, entertainment and hospitality are the most likely to have become economically vulnerable, with 47 per cent of those working in industries such as sport and recreation, entertainment and hospitality now economically vulnerable.

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[1] The newly vulnerable is defined as a Couple with/without children or Single with children AND Annual household income < $100,000, or Single without children AND Annual personal income < $60,000

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Delia Rickhard

Eleven trailblazing organisations yesterday unveiled their commitment to a new innovative program designed to stimulate inclusive economic growth, especially focused on women.

According to the CEO of Good Shepherd Microfinance, Adam Mooney, the new Financial Inclusion Action Plan (FIAP) program will see coordinated, measurable actions to improve financial resilience for large numbers of people experiencing financial exclusion and hardship.

“We all want to be able to access and use financial services that are appropriate to our circumstances and improve our lives. Yet, there are three million people, or one in six adults, who are financially excluded in Australia,” said Mr Mooney.

“The FIAP program invites organisations to turn good intentions into action that works by collaborating across sectors to improve financial inclusion for everyone,” he said.

Good Shepherd Microfinance and partners EY, Centre for Social Impact (CSI) and the Australian Government have developed the FIAP program, guided by an advisory group, Chaired by Ms Delia Rickard, Deputy Chair of the Australian Competition and Consumer Commission.

“Financial Inclusion Action Plans provide an opportunity for organisations to explore their current business operations and identify how they are taking action to realise financial inclusion through relationships, impact, learning and reporting,” said Ms Rickard.

“The 11 trailblazer organisations are the first among banks, energy companies, insurers, governments, universities, community organisations and others to commit to the program.

“Financial inclusion is a shared opportunity. By working collaboratively across business, community and government, Australia is taking great strides towards a more financially inclusive society,” said Ms Rickard.

Suncorp Group CEO and Managing Director Michael Cameron said: “Suncorp has a long history in supporting communities and customers and is looking forward to working alongside other top companies to help improve the financial resilience and capabilities of all Australians.”

“We are determined to meet the needs of our customers, employees and the broader community by providing them with access to relevant and affordable products and services that provide protection for today, and confidence for tomorrow” he said.

Mr Mooney also said that increased financial inclusion was linked to improved gender equality and safer outcomes for women and their children.

“Building women’s financial resilience is good for everyone. Financially confident and resilient women create financially resilient families that are less likely to be victims of forms of family violence such as financial abuse.”

“FIAPs will give organisations the opportunity to take meaningful and significant actions towards systemic change, allowing greater access to their products and services and in turn promoting economic participation by women,” he said.

The cross sectoral approach of the FIAP program places Australia in a global leadership role with regards to its international commitments to the G20 and the Global Financial Inclusion Action Plan.

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Rebecca Glenn

Initiatives to combat the financial abuse of women are among the winners of this year’s Financial Literacy Awards, announced at a dinner last night.

According to research by Good Shepherd Microfinance, 8 in 10 women who experience family violence also experience financial abuse, such as withholding money, refusing to contribute to the family or running up debts in a partner’s name.

With efforts to address family violence now firmly on the national agenda, the awards recognised two projects that address the complex issue of financial abuse:

• Good Shepherd Microfinance ‘Women & Money: an introduction to financial abuse’ – Outstanding Achievement Award for targeted financial literacy program
• WIRE Women’s Information ‘Relationship Problems & Money’ – Outstanding Achievement Award for research

Good Shepherd Microfinance developed an online training program that equips microfinance counsellors, frontline staff and volunteers to identify financial abuse among clients and refer them to support services.

WIRE Women’s Information approached the issue by seeking to better understand the barriers women face to building financial independence after leaving an abusive relationship.

“This research formed the basis of a training program for financial practitioners and support services, a submission to the Victorian Royal Commission on Family Violence and a booklet for women who are facing financial abuse. This booklet is now WIRE’s most widely requested resource,” Rebecca Glenn, CEO, Financial Literacy Australia said.

Financial literacy helping migrant women

Another award winner focused on empowering refugee and migrant women through financial literacy. Melbourne-based Women’s Health in the North (WHIN) found that its program to help women start small businesses was held back by their lack of basic financial skills.

“Managing Money: Every Woman’s Business teaches topics such as budgeting and saving, in a visual, engaging and culturally sensitive way. WHIN has held several ‘Train the Trainer’ sessions for the modules, shared the resource with other community organisations and seen over 400 migrant women participate in workshops,” Ms Glenn said.

Corporate and government campaigns recognised

The awards also recognised the work of the corporate sector, with ANZ receiving two awards including an Award in the research category for a meta-evaluation of the Saver Plus program, which provides education, personal coaching and matched funds of up to $500 savings for low-income families. The study included a valuation on the social return on investment.

“The results demonstrated the long-term benefits for participants included increased financial capabilities, levels of financial self-efficacy, financial resilience and improved personal and social wellbeing. It’s an important validation of the work that we know, anecdotally, makes such a big difference to families in Australia,” Ms Glenn said.

The Australian Taxation Office was awarded for its innovative approach to targeting young people to reduce multiple super accounts. The campaign used animated video, infographics, paid media and social media, and PR, to encourage young people to engage with their super. It saw a 35% uplift in the target audience checking their balances and 17% consolidating their accounts.

“The winning entries were creative and considered, with a strong focus on evidence and research to ensure they get results,” said Ms Glenn.

“Increasing the financial literacy of all Australians has benefits for both individuals and the broader economy. However, different groups have different needs, which is why it’s important to have a diverse range of initiatives led by government, community and commercial organisations. The Financial Literacy Awards prove that this model is working well and delivering real results.”

Full list of award winners

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