Defined Terms and Documents       

Numeracy And Literacy Range Of Australians or Numeracy And Literacy Skills or Numeracy And Literacy Capacity means (for the purpose of the Writer's submission) the relative ability of Australians to understand the advantages and disadvantages of the various Credit Card Products, in particular to identify the pitfalls of -

(i)         some Credit Card Issuers (exampled in Labyrinth of ‘Concealed Spiders’) webpage advertisements; and

(ii)        the Usurious Unsecured Personal Loan Interest Rates Charged On Many Credit Cards.

The Numeracy And Literacy Range Of Australians varies markedly with only slightly over half the Australian population possessing the minimum required numeracy and Financial Literacy skills at Level 3 or above to meet the complex demands of everyday life and work in the emerging knowledge-based economy’ as identified in the Productivity Commission's Staff Working Paper Links Between Literacy and Numeracy Skills and Labour Market Outcomes relying on (ABS 4228 - 2006, p. 5).  

A significant percentage of the nearly half of the population, as identified in that Productivity Commission's Staff Working Paper as level 1 or level 2 Australians, are Financially Uneducated And Vulnerable Australians who have suffered Extreme Financial And Emotional Distress due to -

(i)         being charged Usurious Unsecured Personal Loan Interest Rates Charged On Many Credit Cards; and

(ii)        scheming advertising described in Labyrinth of ‘Concealed Spiders by some Credit Card Issuers intended to mislead more vulnerable Credit Cardholders in order to increase Interest And Fees Revenue.

ABS Report 4228 'Programme for the International Assessment of Adult Competencies, Australia, 2011-2012 - ADULT LITERACY AND LIFE SKILLS SURVEY, SUMMARY RESULTS AUSTRALIA' notes:

         " Literacy in 2006

Approximately 7.3 million (44%) Australians aged 15 to 74 years had literacy skills at Levels 1 or 2, a further 6.4 million (39%) at Level 3 and 2.7 million (17%) at Level 4/5. For the numeracy scale, approximately 8.9 million (55%) Australians were assessed at Level 1 or 2, 5.3 million (32%) at Level 3 and 2.1 million (13%) at Level 4/5."

Many Financially Uneducated And Vulnerable Australians have paid a disproportionate share of the cost of the Credit Card Products, with the Financially Educated like the Writer making no contribution because their credit cards have no annual fee and they have periodical debits set up, so their Outstanding Indebtedness for each of their Credit Cards is automatically debited against a nominated bank account each month.  Ipso facto, they enjoy all the benefit of using Credit Cards, in particular enjoy a Line of Credit between 28 days and up to 55 days Interest Free Period, but make no meaningful contribution to Credit Card Issuers' operating costs.

Financially Uneducated And Vulnerable Australians notes:

"The majority of credit card users (by number) in Australia are ‘transactors’, consumers who pay outstanding balances in full on or before the time the minimum monthly repayments fall due and thus do not incur interest rate or penalty charges.4

‘Revolvers’, who make up the other category of credit card user (and who account for the majority of total outstanding balances on credit cards), pay the minimum monthly repayments or some larger fraction of the outstanding balance and are exposed to the typically high interest rates levied on the unpaid amount.5"

The above estimation that "only slightly over half the Australian population possess the minimum required numeracy and Financial Literacy skills" is based on the following explanation.

The Productivity Commission's Staff Working Paper Links Between Literacy and Numeracy Skills and Labour Market Outcomes dated Aug 2010 gathered data in order to ascribe the below five different Numeracy And Literacy levels for literacy, problem solving and numeracy to assess labour market outcomes for the Australian adult population.  Literacy skills were separately assessed under document literacy, prose literacy and health literacy.

Each skill domain was measured in two different ways:

1.     On a continuous scale ranging from 0 to 500 where each person is located along this continuum, with those people who have poorer literacy or numeracy obtaining a lower rating than those who have higher literacy and numeracy skills.

2.   Each skill is then converted into a discrete skill level, ranging from level 1 (the lowest skill level) to level 5 (the highest skill level). Using document literacy, an example of how levels 1 to 5 are constructed from the values in the 500 point index is provided in box 2.1. An explanation of how a person’s capabilities differ according to each skill level is also provided.

Australians with the -

*         lowest Numeracy And Literacy level were ascribed 'level 1'; and

*         highest Numeracy And Literacy level were ascribed 'level 5'.

The Productivity Commission's Staff Working Paper Links Between Literacy and Numeracy Skills and Labour Market Outcomes dated Aug 2010 included  "Key Points" that included:

– for nearly half of the population were assessed at either levels 1 (the lowest level) or 2, both of which are below the minimum level deemed necessary to participate in a knowledge-based economy (level 3).

-  For example, level 3 is regarded by the survey developers as the ‘minimum required for individuals to meet the complex demands of everyday life and work in the emerging knowledge-based economy’ (ABS 2006, p. 5).

"In 2006, the proportion of the working-age population (15–64 years) who had Language Literacy Numeracy (LLN) skills at levels 1 or 2, supposedly lower than the minimum required, was 44 per cent for prose literacy and document literacy, and 50 per cent for numeracy (figure F.1).  The proportion at level 3 was 39 per cent for prose literacy, 37 per cent for document literacy and 33 per cent for numeracy."

ABS report in 2006 noted  "On the numeracy scale, approx 7.9 million (53%) Australians were assessed at Level 1 or 2, 4.7 million (31%) at Level 3 and 2.4 million (16%) at Level 4/5".

Productivity Commission Staff Working Paper 2014 included:

“Some Australians have low (level 1 or below) literacy and numeracy skills. In 2011–12:

–      14 per cent of Australians could, at best, read only relatively short texts from which they were able to locate only a single piece of information.

–      22 per cent could only carry out one-step or simple processes such as counting where the mathematical content is explicit with little or no text or distractors.”

–   16 per cent of the population have high literacy (level 4/5), meaning they can make complex inferences and evaluate subtle truth claims or arguments in lengthy or multiple texts. 

“Last year’s Productivity Commission report (dated 2018) into the superannuation sector found that about 30 per cent of Australians have low financial literacy, and a quarter do not understand basic financial concepts.”

“Recent studies have found that about half of all adult Australians do not have the Language Literacy Numeracy skills required for them to meet the demands of their day-to-day lives. A report commissioned by the 11 industry skills councils in 2011 called No More Excuses stated that:

·         53% of Australian adults have difficulty with numeracy

·         46% have difficulty with reading.

These figures were based on research published by the Australian Bureau of Statistics (ABS) in its Adult Literacy and Life Skills Survey (2006). Although they don't relate directly to literacy and numeracy levels in the workforce, these statistics are a good reflection of the overall scope of the problem.”

See also Financial Literacy which cites research by CBA and ANZ and refers to -

*        Australian Social Trends - 2008 Article: Adult literacy

*        Mapping adult literacy performance - written by Michelle Circelli, David D Curtis and Kate Perkins.

*        Numeracy And Literacy Authorities.